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.