Asian currencies mixed late, domestic concerns take center
Asian currencies mixed late, domestic concerns take center
SINGAPORE (Dow Jones): Asian currencies were mixed against the
U.S. dollar in late trading Wednesday, as domestic concerns
superseded those about the U.S. dollar's upward move against the
yen.
The Singapore dollar and Indonesian rupiah rallied, while the
Thai baht, Philippine peso, South Korean won and New Taiwan
dollar languished.
In late trading, the U.S. dollar was trading at 106.90 yen, up
from 106.57 yen on Tuesday. A late session spike as high as
107.22 yen did little to roil regional markets, which remained
focused on political and financial developments on the home
front.
In late trading in Singapore, the U.S. dollar was trading at
S$1.7089, down from S$1.7129 on Tuesday.
Ishak Ismail, market intelligence analyst at IDEA Global.com
in Singapore, said local banks have been more aggressive than
usual in selling the U.S. dollar when it heads up toward $1.720.
"The only thing that has stopped the U.S. dollar from heading
above $1.7200 has been this selling," he said.
"The market perception is that the Monetary Authority of
Singapore is capping the rise of the U.S. dollar through indirect
intervention, by getting the local banks to actively sell," said
a trader at a U.K. bank in Singapore.
The U.S. dollar is also trading at 41.285 baht, down from
41.335 baht late Tuesday. The U.S. dollar had managed to trade as
high as 41.585 baht overnight, but profit-taking and new U.S.
dollar short positions pushed it down. Traders expect the
European and U.S. markets to test 42 baht later Wednesday.
Thailand's deputy finance minister, Pisit Leeahtam, did
reiterate Wednesday that a weak baht would be relatively good for
exporters.
Although he declined to comment specifically on the level of
the baht, Leeahtam said that "we are quite satisfied" with
Thailand's managed float exchange rate system, which has kept the
baht in a range of plus or minus two baht of 38 baht to the U.S.
dollar. He said he doesn't expect the central bank to intervene
to defend the currency, but that it may step in to ensure that
exchange rate movements "are not too erratically rapid."
Against the Indonesian rupiah, the U.S. dollar is trading at
Rp 8,373, down from Rp 8,485 in late Asian trading Tuesday.
Traders said the dollar is for the moment moving sideways in a
wide band against the rupiah.
"A U.S. investment house is looking to sell at Rp 8,600, which
will cap the topside; and local traders aren't confident that the
country's political and social problems will subside any time
soon, so that will keep the dollar above Rp 8,250," said Ismail.
Traders said the usual Indonesian complaints continue to
hamper market sentiment - the unresolved Bank Bali scandal, East
Timor and the upcoming presidential elections in November.
Against the Philippine peso, the dollar is trading at 41.010
pesos, up from 40.943 pesos Tuesday, although the dollar did
manage to climb as high as 41.175 pesos early in Wednesday's
session.
In North Asia, against the New Taiwan dollar, the U.S. dollar
is trading at NT$31.798, almost unchanged from NT$31.797 Tuesday.
And against the South Korean won, the dollar is trading at
1,217 wons, up from 1,215 wons late Tuesday.
Traders said the market expects the U.S. dollar to climb to
1,225 wons in coming days, primarily on concerns that a rumored
shift toward a tighter monetary policy may prove true.
"The U.S. dollar is well supported around 1,216 wons, but on
technical expectations alone, the market expects to see 1,225
wons," the currency strategist said.