Asian currencies mixed late, baht regains footing
Asian currencies mixed late, baht regains footing
SINGAPORE (Dow Jones): Asian currencies were mixed late Thursday after having been wedged within narrow trading bands, with a bounce in the Japanese yen providing a mild reprieve for some of the currencies, dealers said.
The Indonesian rupiah ended slightly higher in uneventful trading as some foreign oil companies sold dollars to get rupiah for corporate tax payments, dealers said.
The dollar closed at Rp 11,160, down from its close Wednesday at Rp 11,210.
The dollar fell to an intraday low of Rp 11,115 earlier Thursday before being lifted to Rp 11,200 by demand from local companies. But, selling orders from several foreign oil companies pushed the U.S. unit lower again, dealers said.
The currency pair moved in a narrow range also because the market lacked fresh incentives to speculate on, dealers added.
"We applied the buy at low and sell at high strategy today as there wasn't any fresh political development to trade on," said a dealer with a foreign bank.
The market is closely watching for further political development ahead of President Abdurrahman Wahid's likely impeachment in August.
Following Wednesday's wild swings, movements in the baht were relatively tame. Market participants were hesitant to take any aggressive positions as they remained mystified by the central bank's foreign exchange policy.
"Everybody's wondering what the central bank is trying to do," said a dealer at an Asian bank.
At 0815 GMT (3.15 p.m. Jakarta time), the dollar was quoted at 45.090 baht, below 45.255 baht late Wednesday, as speculators still holding long positions in the U.S. currency unwound their positions, dealers said.
Some commercial banks have been caught short dollars since late Wednesday, and are likely to cover their positions when the U.S. currency retreats further, toward the 45.000 baht level, dealers added. These banks had oversold their long positions over the past two days, amid confusion over the central bank's earlier plan to introduce foreign exchange disclosure requirements for nonresident transactions from July 2. Many had feared that the stringent reporting requirements would be a prelude to capital controls.
The baht's strength rubbed off onto the Philippine peso and to a lesser extent the Singapore dollar, which was tracking the yen more closely, dealers said.
The Philippine currency recouped its earlier losses to close almost unchanged at 50.710 pesos against the dollar, compared with 50.720 pesos Wednesday. The peso had hit an intraday low of 50.810 pesos.
The central bank's decision to leave its overnight rates unchanged also helped the peso regain its footing, dealers said.
"The decision caught a portion of the market short (on the peso) as recent central bank comments had indicated an even chance of rate cuts following softer-than-expected May CPI numbers," Bank of America said in a report.
At 0930 GMT (4:30 p.m. Jakarta time), the Singapore dollar was stronger at S$1.8097 against the U.S. currency compared with S$1.8121 late Wednesday.
Against the yen, the U.S. dollar was quoted at Y119.88, below Y120.33 late Wednesday in New York. The dollar was at Y120.40 late Wednesday in Tokyo.
The South Korean currency ended barely changed at 1,286.1 won to the dollar Thursday compared with Tuesday's close of 1,286.7 won. Korean markets were closed Wednesday for a public holiday.
The New Taiwan dollar closed unchanged at NT$34.065 against the U.S. currency Thursday.