Asian currencies mixed late; rupiah falls as euphoria ebbs
Asian currencies mixed late; rupiah falls as euphoria ebbs
SINGAPORE (Dow Jones): The Indonesian rupiah gave up some of its recent gains Wednesday as euphoria over Megawati Sukarnoputri's presidency ebbed and market players awaited word on the composition of her new government.
Other Asian currencies were mixed in fairly lackluster trade.
The Singapore dollar and New Taiwan dollar strengthened modestly, while the Thai baht, South Korean won and Philippine peso edged lower.
Indonesia's national assembly was poised to elect Megawati's vice president late Wednesday. Megawati is expected to announce her cabinet appointments by the end of the week.
Analysts say the appointments, especially to key financial and economic posts, will be closely watched to assess how serious the newly installed Megawati is about pursuing reforms in Indonesia.
"There are two things she must get. Firstly, national backing to survive and ensure Parliament support for her programs, and professional people to tackle economic matters," said Jusuf Wanandi, a political analyst at the Center for Strategic and International Studies in Jakarta.
Megawati's experience in economic policymaking is somewhat thin, so the market is hoping she will tap strong candidates for those jobs and delegate authority to them, another analyst said.
The rupiah hovered around Rp 10,000 per dollar for most of the day as market speculation swirled as to the possible makeup of the cabinet. Late in Asian trading the dollar was at Rp 9,975, up from 9,875 Tuesday.
The rupiah rallied to a five-month high of Rp 9,750 per dollar Tuesday, one day after Indonesian lawmakers removed President Abdurrahman Wahid and replaced him with Vice President Megawati.
The rupiah could strengthen to Rp 9,500 against the dollar in the near-term if the market likes Megawati's cabinet picks and the International Monetary Fund indicates it will resume its $5 billion assistance program, BA Asia said in a note to clients.
However, the "high risk" of disillusionment over the longer term could push the dollar back up to the Rp 10,500-Rp 10,800 range by year-end, BA Asia added.
The Singapore dollar touched a five-week intraday high before settling back near the end of the Asian day to finish slightly higher against its U.S. counterpart.
The U.S. dollar fell to S$1.8150 within the first hour of trading, its weakest level since June 18, when it slumped to S$1.8145 in intraday trading.
Near the close, the U.S. dollar was quoted at S$1.8170, down from S$1.8191 late Tuesday.
Market players were unwinding long-dollar positions following the recent strength in the rupiah, but dealers said there was healthy demand for the U.S. currency below the S$1.8180 level.
There remains a general bias in Asia in favor of the U.S. dollar that will likely prevent the U.S. currency from falling much further against the Singapore dollar in the near-term, dealers added.
The New Taiwan dollar extended its gains against the U.S. dollar to six straight sessions on inflows of foreign equity funds and suspected central bank support.
The U.S. dollar closed at NT$34.850, compared with NT$34.878 Tuesday.
The Thai baht traded in a fairly narrow range of 45.690-49.750 baht per dollar as the market remained cautious about currency reporting requirements to be imposed on foreign dealers at the end of the month.
Near the end of Asian trading the dollar was quoted at 45.750 baht, up from 45.730 baht late Tuesday.
The South Korean won came off its morning lows to finish almost unchanged.
The dollar ended at 1,308.8 won, up from Tuesday's close of 1,308.5 won.
The Philippine peso slipped amid corporate demand for dollars. The currency's decline was limited by suspected central bank intervention, traders said.
The Philippine peso slipped amid corporate demand for dollars. The currency's decline was limited by suspected central bank intervention, traders said.
The dollar closed at its intraday high of 53.600 pesos on the Philippine Dealing System, up from 53.550 pesos Tuesday.