Asian Currencies Mixed Late; Market Awaits Word On Bin Laden
Asian Currencies Mixed Late; Market Awaits Word On Bin Laden
SINGAPORE (agencies): Asian currencies were mixed against the dollar Wednesday as investors digested the latest developments in the U.S. effort to force the extradition of suspected terrorist Osama Bin Laden.
The dollar, which has suffered in recent weeks due mainly to the deteriorating U.S. economy, got a boost from the Bank of Japan, which intervened in the currency market for the second time this week in an attempt to weaken the yen.
The Singapore dollar, Philippine peso and Indonesian rupiah all tumbled against the U.S. currency. The Thai baht edged higher, while the South Korean won and New Taiwan dollar were little changed.
The Indonesian rupiah ended down on corporate demand for dollars, but off its day lows as the central bank apparently sold dollars to help the local currency.
The dollar was quoted between Rp 9,590 rupiah and Rp 9,640 late Wednesday, much higher than Rp 9,520 to Rp 9,560 Tuesday.
Bank Indonesia stepped in during thin afternoon trading to sell about US$20 million through brokers, Jakarta-based bankers said.
Still, the intervention is unlikely to help in the long term, with the rupiah remaining under pressure from debt repayment, traders said. Public debt alone is equal to a year's gross domestic product.
The rupiah is also facing pressure from fears any retaliation by the U.S. for last week's terrorist attacks could incite further unrest in Indonesia, the world's most populous Muslim nation
However, the outlook for the dollar over the medium term remains poor, analysts said, citing fears the U.S. economy may tip into recession and the difficulty the country will have in funding its ballooning current account deficit.
Last week's terrorist attacks in New York and Washington, and the threat of a U.S. military response have also hurt sentiment toward the dollar and U.S. stocks.
President Bush has demanded Afghanistan's hard-line Islamic Taliban government turn over Bid Laden, who is suspected of masterminding the attacks. Taliban leaders were considering whether to extradite Bid Laden or declare a holy war on the U.S. if it attacks Afghanistan.
The Thai baht closed higher in light trade closely tracking the Japanese yen as uncertainties over the extent of U.S. retaliation pressured the dollar against regional currencies, dealers said.
In late Singapore trade, the US dollar was lower at 1,296.5 South Korean won from 1,297 on Tuesday, 34.5365 Taiwan dollars from 34.57, and it was steady at 44.2 Thai baht.
It was higher at 51.395 Philippine pesos from 51.315 and 1.7413 Singapore dollars from 1.7357.
In Tokyo, the dollar firmed against the yen after Japan's finance ministry intervened in the currency market for the second time this week to cap gains by the Japanese unit, dealers said.
The greenback traded at 117.62-65 yen at 5:00 pm (0800 GMT) in Tokyo Wednesday, down slightly from 117.75 straight after the intervention, but up from 117.25 yen just before it. The dollar was quoted at 117.25 yen in New York and 117.80-83 yen in Tokyo late Tuesday.
The Ministry of Finance instructed the Bank of Japan to sell yen against the dollar to rein in the rise of the Japanese unit which is threatening to strangle the already fragile economy. It was the second time this week the government has stepped into the foreign exchange market.
Finance Minister Masajuro Shiokawa said Japan was in close contact with U.S. and European authorities when it intervened Wednesday, though Japan acted alone, and warned that the ministry was ready to take steps again if needed.