Asian currencies mixed late on obscure regional outlook
Asian currencies mixed late on obscure regional outlook
HONG KONG (Dow Jones): Asian currencies had a mixed day Monday as a weakening Japanese yen further clouded an already uncertain regional outlook.
The arrival of international peacekeepers in East Timor failed to relieve the pressure on the Indonesian rupiah, which ended lower as skeptical market players waited to gauge the reaction of the Indonesian military and local militias to the Australian-led deployment.
The Thai baht, however, strengthened, boosted by buying related to anticipated foreign investment, despite the release of disappointing economic growth figures for the second quarter.
The same investment flow weighed on the Singapore dollar, as Singapore's United Overseas Bank was seen selling the local currency for baht ahead of its expected acquisition of a stake in Thailand's Radansin Bank.
Elsewhere, the Philippine peso inched higher in parallel with the baht, even though plentiful domestic liquidity allowed the local authorities to steer short-term interest rates lower.
In North Asia, the South Korean won regained some of the ground lost in Friday's sell-off. The New Taiwan dollar ended marginally lower, weighed down by the yen.
The deployment of international peacekeeping forces to East Timor early Monday did little to burnish Indonesia's tarnished image in the eyes of investors.
Traders said that participants were holding back from the market, waiting to see how local units of the Indonesian military and integrationist militias respond to the Australian-led force.
Even if the peacekeeping mission is successful, however, the unresolved banking scandal centered on Bank Bali will continued to weigh on the rupiah, as Bank Indonesia Deputy Governor Miranda Gultom acknowledged Monday.
Speaking to reporters on the sidelines of a central bank forum on the scandal, Miranda admitted that the suspension of International Monetary Fund and World Bank loans is harming the country's economy.
"In terms of the amount of money that's supposed to be released, it's not that much," Miranda said, but "it ruins investor and market confidence in Indonesia."
The extent of the damage was apparent late Monday, as the U.S. dollar crept higher to end local interbank trading at Rp 8,300, up from Rp 8,177 Friday.
Elsewhere the baht strengthened on what dealers said was sustained buying of the Thai currency by Singapore's United Overseas Bank, which is widely believed to be on the point of announcing the acquisition of a stake in Thailand's Radanasin Bank.
Although the baht slipped from its intraday high following the release of data showing the Thai economy grew by a disappointing 3.5 percent in the second quarter compared with a year earlier - the market had been expecting growth of around 6 percent - the baht still ended the day higher.
Toward the close of local trading, the U.S. dollar was quoted against the baht at 39.9850 baht, down from 40.0100 baht Friday.
Selling of Singapore dollars by UOB in the other leg of its cross-trade against the baht was blamed for dragging the Singapore dollar lower.
Toward the end of local trading, the U.S. dollar was quoted against the Singapore currency at S$1.6957, up slightly from S$1.6937 late Friday.
The Philippine peso edged higher, supported largely by the strength of the baht, with which the peso shows a high degree of correlation. At the Manila close, the U.S. dollar was quoted at 40.140 pesos, down from 40.155 pesos Friday.
In North Asia, the Korean won regained some of the ground it lost Friday, when sales by foreign investors drove it to a one- month low, as Korean exporters took advantage of the favorable exchange rate to cash in dollar revenues.
At the close, the U.S. currency was quoted at 1,200.70 won, down from 1,202.80 won at the end of the previous session.
The New Taiwan dollar closed marginally weaker, tracking the yen's fall, although dealers said the central bank stepped into the market to moderate the extent of the local currency's decline.
At the session's close, the U.S. dollar was quoted at NT$31.796, up from NT$31.794 at the previous finish.