Asian currencies mixed late, politics overwhelm U.S. GDP
Asian currencies mixed late, politics overwhelm U.S. GDP
SINGAPORE (Dow Jones): Asian currencies were mixed late Monday, as domestic political anxieties in Southeast Asia overwhelmed the market's relief over stronger-than-expected U.S. first-quarter economic data, dealers said.
The South Korean won and the New Taiwan dollar were the main beneficiaries of the surprisingly strong U.S. first-quarter economic growth, which bodes well for their export-oriented economies, market watchers said.
The Indonesian rupiah and the Thai baht were firmer as participants, who were overloaded with dollars, unwound some of their positions. The Singapore dollar was weaker.
The dollar closed at Rp 11,600, down from Rp 10,800 Friday.
Dealers said trading was thin as many participants were away from Jakarta on fears of possible violence Sunday and Monday.
Thin trading paved the way for the dollar's slide, which was also pushed lower by dollar selling by the Indonesian Bank Restructuring Agency, dealers said.
"We suspected IBRA was in the market selling dollars today," said a dealer with a foreign bank.
But it was the Philippine peso that grabbed the limelight, crumbling as domestic political tensions ran high amid growing protests calling for the reinstatement of deposed leader Joseph Estrada.
The peso was also hurt by widespread rumors of a looming coup against President Gloria Macapagal Arroyo, who faced the first major crisis of her first 100 days in power, although the police and military leadership has so far pledged their support for Arroyo.
Indeed, after the market closed, Arroyo said in a speech marking her first 100 days of office that an attempt was made over the weekend to remove her from office, but her government remains in "absolute control of the situation"
"Although this episode is unlikely to lead to a change in government, like (what happened) in January, it reminds President Arroyo of her vulnerability," said Syetarn Hansakul, an economist at WestLB Research. "Using the January episode as a guide, support from the army is the deciding make-or-break factor."
The dollar closed at 51.450 pesos on the Philippine Dealing System, up from 50.870 pesos Friday.
The dollar had surged to 51.550 pesos at the open, its highest level since Estrada's ouster in January.
Simmonds at Salomon Smith Barney/Citibank said for currencies like the peso and the rupiah, "a lot of the political news have been quite well priced in."
"The market is very long dollars in Indonesia, the Philippines and Thailand, to some extent," he said.
Still, there is little risk of a massive selloff in the U.S. currency.
The Thai currency was slightly stronger at 45.605 baht against the dollar, compared with 45.665 baht late Friday.
"U.S. banks were selling dollars (against baht) the whole day, probably unwinding for customers," said a dealer.
The dollar finished at 1,319.7 won, down from Friday's close of 1,327.6 won.
Against the New Taiwan dollar, the U.S. currency ended at NT$32.894, lower than NT$32.928 Friday.
The Singapore dollar was steady at S$1.8186 against its U.S. counterpart, after briefly weakening to S$1.8200 earlier on strong corporate demand for the U.S. currency.
In London, the dollar rose more than a quarter of a percent against the euro on Monday.
At 1036 GMT (5.36 p.m. Jakarta time), the euro was trading just below $0.89.
The yen was up about half a percent against the dollar to around 123.30 yen and near one percent against the euro to roughly 109.50 yen.