Asian currencies mixed late, market awaits fresh U.S. data
Asian currencies mixed late, market awaits fresh U.S. data
Dow Jones, Singapore
Asian currencies were mixed against the dollar in a lackluster
trading session Friday.
The South Korean won, New Taiwan dollar and Philippine peso
weakened, while the Singapore dollar, Thai baht and Indonesian
rupiah strengthened.
Continuing uncertainty about what slower U.S. growth may mean
for the global economy kept market players from pushing
currencies strongly in either direction, analysts said.
A recent string of negative economic data out of the U.S.,
including weak gross domestic product figures for the second
quarter and several reports showing soft manufacturing activity
in July, added to concerns that the U.S. may experience a double
dip recession.
Such a scenario, while unquestionably bad for the U.S., could
also hurt Asian economies that rely to varying degrees on demand
from the U.S. for their exports.
But there are other signs the U.S. economy remains healthy,
including a greater-than-expected 10 percent increase in July
auto sales to 18.1 million vehicles at a seasonally adjusted
annual rate compared with a year earlier. This was the highest
rate since a record of 21.3 million last October.
Players will be looking to the U.S. July employment report to
be issued later Friday that could help establish a clearer
direction for trading.
"While labor market data tend to be a lagging indicator, the
current negative bias in U.S. financial markets will leave the
dollar vulnerable to a weaker-than-expected report," BNP Paribas
said in a research note.
The New Taiwan dollar weakened for the first time in four
sessions after the central bank cut rates on short-term
certificates of deposits it uses in open market operations.
A central bank official said the move didn't represent an
easing of monetary policy, but rather was an effort to keep an
appropriate slope to the yield curve for the CDs.
However, some analysts said the central bank was gearing up
for a cut in the official discount rate aimed at slowing down the
appreciation of the New Taiwan dollar.
The U.S. dollar closed at NT$33.723, up from NT$33.667
Thursday.
The won was pressured by U.S. dollar short covering and
foreign selling of local stocks.
The dollar closed at 1,184.5 won, up from 1,182.8 won
Thursday.
Foreign investors were net sellers of 207 billion won worth of
shares Friday, continuing a recent trend. When those investors
sell local stocks, they usually convert the won proceeds into
dollars, thereby supporting the U.S. currency.
The dollar traded weaker in the morning, hitting a low of
1,175.7 won as exporters sold the U.S. currency and other players
unwound long dollar positions. At that level, talk of possible
central bank intervention to support the dollar began
circulating, helping build a base for the U.S. currency's rebound
in the afternoon session.
The peso was weighed down by corporate demand for dollars and
a rumor - which was subsequently denied - that the country's
finance secretary would resign.
The dollar closed at 51.30 pesos on the Philippine Dealing
System, up from 51.15 pesos Thursday.
The dollar opened at 51.10 pesos, but rallied in the afternoon
to a high of 51.32 pesos, after the rumor circulated that Finance
Secretary Jose Isidro Camacho planned to resign.
Camacho immediately denied the rumor, helping to calm the
market before trading closed.
"I have no reason to resign. It's not even within my
consciousness," Camacho said.
The rupiah was supported by suspected intervention from the
central bank.
The dollar ended at Rp 9,085, lower than Rp 9,140 at
Thursday's close.
Dealers said the central bank sold about $20 million in the
spot market to spur demand for the local currency. The central
bank doesn't comment on specific actions in foreign exchange
markets.
Deputy central bank Governor Miranda Gultom said Friday the
bank expects interest rates to fall further this year due to
benign inflation. He also said the bank expects the rupiah to
strengthen toward the end of the year.
The Singapore dollar was buoyed by a stronger yen.
Late in Asia the U.S. dollar was quoted at S$1.7559, down from
S$1.7575 late in Asia Thursday. It traded between S$1.7548 and
S$1.7574.
The U.S. dollar traded as low as S$1.7515 in early trading.
But buying from local banks later helped lift the U.S. unit off
its early lows and back above S$1.7550.
The baht also benefited from yen strength. In addition, net
foreign buying of Thai stocks a day earlier helped sentiment
toward the local currency, dealers said.
Near the end of Asian trading the dollar was quoted at 42.105
baht, down from 42.140 baht late Thursday.