Asian currencies mixed late as yen keeps some afloat
Asian currencies mixed late as yen keeps some afloat
SINGAPORE (Dow Jones): Asian currencies were mixed late Monday, finding solace from the yen's mild bounce and anxieties over regional central banks' next moves, dealers said.
The Indonesian rupiah ended a touch weaker Monday in thin trading as players bought dollars due to the current political uncertainty.
The Singapore dollar, the Thai baht and the South Korean won were marginally higher, and the Philippine peso was slightly lower. Taiwan's financial markets were closed for a national holiday.
A victory for Japan's ruling Liberal Democratic Party in the first critical election since Junichiro Koizumi ascended to its leadership provided only a marginal boost to the yen.
At 0740 GMT (2.40 p.m. Jakarta time), the dollar was quoted at Y124.19, below Y124.43 late Friday in New York.
"Economic fundamentals and the prospects for a weaker yen point to lower Asian currencies, but fears of central bank intervention are restraining the downward movement," said an economist at a European bank.
Caution ahead of the Federal Reserve's interest rate decision Wednesday and a holiday in Hong Kong Monday kept Asian currencies trapped within tight trading bands, dealers said.
A report in Monday's edition of the Financial Times that the U.S. might be on the brink of its first recession in a decade heightened expectations for a 50-basis-point interest rate cut by the Fed, dealers said.
The dollar closed at Rp 11,365, up from its close Friday at Rp 11,355.
President Abdurrahman Wahid said over the weekend that his major political opponents had agreed not to push ahead with his impeachment at a meeting of the nation's highest legislative body Aug. 1.
But the Indonesian Democratic Party of Struggle, or PDI-P, and Golkar, the largest parties in parliament, both said the impeachment in connection with two financial scandals will go ahead.
The lack of clarity over Wahid's political future is hurting sentiment toward the rupiah, dealers said.
The Thai baht remained trapped in narrow ranges, albeit with a firmer bias, as the market remained wary of stricter foreign exchange reporting requirements without a clear outcome from the central bank's meeting with onshore banks Monday.
Following the meeting, Thai central bank Assistant Governor Chetthavee Charoenpitaks said a review of onshore banks' reporting requirements for transactions of foreign exchange and securities involving nonresidents hasn't been completed.
At 0845 GMT (3.45 p.m. Jakarta time), the dollar was quoted at 45.160 baht, lower than 45.265 baht late Friday as offshore participants continued to unwind their long-dollar positions, dealers said.
Elsewhere, the yen's gains and fears of central bank intervention - following talk that the Monetary Authority of Singapore had defended the local currency late last week - pushed the U.S. dollar below S$1.8200, dealers said.
The Singapore dollar was quoted at S$1.8184 against the U.S. currency, stronger compared with S$1.8211 late Friday.
Finding support from the yen, the South Korean currency ended marginally stronger at 1,303 won to the dollar, compared with Friday's close of 1,303.8 won.
The Philippine peso resumed its recent decline amid persisting concerns over domestic security and the prolonged hostage crisis in the south, dealers said. Corporate dollar demand added to the pressure on the peso, dealers said.
The dollar closed at 52.265 pesos, higher than 52.210 pesos on Friday.