Asian currencies mixed late, leads rupiah to post gains
Asian currencies mixed late, leads rupiah to post gains
Irene Kwek, Dow Jones, Singapore
Asian currencies were mixed late Wednesday after a day of rangebound trading, despite a hint from the U.S. Federal Reserve that its aggressive rate cutting cycle could soon reverse.
The Indonesian rupiah and Thai baht ended higher against the U.S. dollar, while the Philippine peso closed lower tracking the yen's losses. The Singapore dollar and New Taiwan dollar were little changed.
The South Korean won finished stronger, ending at 1,325.8 won to the dollar compared with 1,326.5 won Tuesday. Participants said exporter dollar sales and unwinding of long-dollar positions contributed to the won's rise.
Thio Chin Loo, regional currency strategist with BNP Paribas, said the won should maintain its stability against the dollar, with the South Korean economy set for a rebound.
To be sure, data issued during the session showed South Korea powered ahead with a 3.7 percent year-on-year expansion in the fourth-quarter, accelerating from a 1.9 percent growth in the third-quarter.
In a report, BNP Paribas said the U.S. dollar had little reaction to the Fed's policy shift.
But the report noted that improving economic growth that caused the Fed to alter its bias should continue to provide underlying support to the U.S. dollar in the medium-term.
Continued investor optimism fueled by the Indonesian government's sale of its stake in PT Bank Central Asia and the prospect of future asset disposals helped the rupiah to close higher at Rp 9,895 to the dollar, compared with Rp 9,965 Tuesday.
BNP Paribas' Thio said the rupiah will come back into focus next week, when the consortium led by Farallon Capital is slated to make payment of around Rp 3.2 trillion for a 30 percent stake in the bank. Farallon will pay for the remaining 21 percent at a later date.
Recent positive investor perception toward Indonesia has been driven by general macroeconomic and sociopolitical stability, Thio said. "You could expect Indonesia back on the radar screen, and people are considering investments in Indonesia."
She expects the dollar to consolidate between Rp 9,800 and Rp 10,000, with a possible break on the downside, heading toward Rp 9,500. DBS Bank's Wee added the rupiah also has the advantage of being a high yielding currency.
Over in Thailand, the baht rose against the dollar on inflows related to equity investments. The U.S. dollar closed at 43.390 bath compared with 43.480 bath Tuesday.
Tracking the yen's fall past 132 yen to the dollar, the peso ended slightly lower at 51.140 peso to the dollar, erasing some losses from its intraday low at 51.260 peso to the dollar. The dollar closed at 51.130 peso Tuesday.
The central bank said the authority didn't intervene to support the peso.
A fresh bomb scare in the capital in the morning prompted some banks to buy more dollars, but the impact was generally limited. In the second such incident this week, Philippine explosives experts defused two improvised bombs found in urban train stations in Metro Manila.
The dollar moved higher against the yen on disappointing Japanese economic data. Late Wednesday in Asia, the dollar was at 132.23 yen, compared with 132.08 yen in New York and 131.14 yen late Tuesday in Tokyo.
Late Wednesday in Asia, the Singapore dollar was little changed against the U.S. dollar, at S$1.8297 compared with S$1.8295 Tuesday.
The New Taiwan dollar ended flat against the U.S. unit at NT$35.050, against NT$35.049 Tuesday.