Asian currencies mixed late; baht's stability may not last
Asian currencies mixed late; baht's stability may not last
SINGAPORE (Dow Jones): Asian currencies were mixed late Friday in dull trade, finding little direction from the Japanese yen's rangebound movements, dealers said.
The Indonesian currency was slightly weaker around Rp 11,200 against the dollar, compared with Rp 11,180 late Thursday on corporate demand for the U.S. currency, dealers said.
Doubts continue about the Thai central bank's monetary policy management, following the sacking of former central bank Governor Chatu Mongol Sonakul last week, dealers said.
Market participants were wary of testing the central bank's resolve, especially after Wednesday's intervention. The central bank, under the new Governor Pridiyathorn Devakula, has underscored its preference for a stable baht and a tighter monetary policy stance.
Concerns over the Thai central bank's foreign exchange disclosure requirements for nonresident transactions - which are now under review - and fears of stricter trading restrictions in the baht also damped offshore interest, dealers said.
"There's no incentive to trade," said a dealer at an Asian bank. "The market's a little bit confused and nervous because the central bank seems a little bit fickle at this moment."
At 0845 GMT (3:45 p.m. Jakarta time), the dollar was quoted at 45.135 baht, marginally higher from 45.090 baht late Thursday.
The dollar barely reacted to an increase in the central bank's benchmark 14-day repurchase rate, as the move was has already priced in the currency, dealers said.
The baht had strengthened briefly to less than 45 baht to the dollar before the central bank's announcement in early trading as participants braced for the imminent move.
But fears of intervention - the central bank had bought dollars Wednesday when the U.S. currency sank below 45 baht - pushed the dollar back above that level.
Foreign equity fund inflows, inspired by Wall Street's overnight gains, helped lift the South Korean won, the New Taiwan dollar and the Singapore dollar Friday, dealers said.
The dollar finished at 1,284.7 won, down from Thursday's close of 1,286.1 won.
Against the New Taiwan dollar, the U.S. currency closed at NT$34.053, a touch lower than Thursday's close of NT$34.065, in dealings valued at US$343.5 million.
Taiwan's central bank - which regularly intervenes to smooth out any volatility in the local currency - bought and sold an estimated US$100 million throughout the session, dealers said.
The Singapore dollar was stronger at S$1.8084 against its U.S. counterpart, compared with S$1.8097 late Thursday.
On the Philippine Dealing System, the peso fell on concerns the ongoing hostage crisis in the south would be prolonged and also on offshore dollar demand, dealers said.
The dollar closed at 50.910 pesos, higher than 50.710 pesos Thursday.
Though market speculation that the central bank had bought dollars in the market Friday wasn't confirmed, Simmonds at Salomon Smith Barney/Citibank said the central bank will likely pick up the U.S. currency when it is stable or weak to build its foreign exchange reserves and service debt repayments over the next few months.
"The nominal level of reserves is not that high" given the lack of foreign direct capital or portfolio inflows into the Philippines, he said, adding that the dollar will likely rise to 51.50 pesos "in the next month or so".
"There'll be more willingness to buy dollars to bolster reserves rather than see any sustained strength in the peso," said Simmonds.