Asian currencies mixed late, rupiah up
Asian currencies mixed late, rupiah up
Dow Jones, Singapore
Asian currencies were mixed against the dollar Monday, with
weakness in the yen pulling the South Korean won and New Taiwan
dollar lower.
The Thai baht also slipped against the dollar, while the
Philippine peso, Singapore dollar and Indonesian rupiah
strengthened modestly.
A campaign by Japanese officials to keep the yen from
strengthening too rapidly against the dollar appears to be paying
off, at least in the near term.
The willingness shown by Japan's Ministry of Finance to
intervene in the currency markets in recent weeks helped keep the
dollar decisively above the 124 yen level.
The dollar traded as high as 124.93 yen during Asian hours,
and finished the day at around 124.70 yen, up from 124.34 yen
late Friday in New York.
"Further intervention successfully put a floor under
dollar/yen and should be seen as a reflection of the Japanese
authorities' determination to address yen strength," Bank of
America currency strategist Marshall Gitler said in a research
report.
"However, dollar sentiment remains bearish and we still expect
a crack of 120 yen even if the move down is only slow," he added.
The won, which hit an 18-month high last week, tumbled for the
third straight session.
In addition to spillover weakness from the yen, the won was
also hit by dollar purchases by a state-run bank.
The dollar finished at 1,230.5 won, up from 1,227.2 won at
Friday's close.
Traders speculated the Korea Development Bank may have been
acting on behalf of the central bank when it purchased dollars
against the won. South Korean government officials have
repeatedly expressed concerns in recent weeks that the strength
of the won may hamper the country's economic recovery. Minister
of Finance and Economy Jeon Yun-churl reiterated over the weekend
that the government stands ready to take action to halt the won's
rise, but he provided no other details.
The dollar traded in a narrow range of 1,229 won to 1,231 won,
partly reflecting the fact that many market players were focused
on the World Cup soccer match between South Korea and the U.S.,
dealers said.
Sentiment toward the rupiah perked up after the London Club
group of private creditors agreed to reschedule Indonesian debt
worth a total US$1.3 billion. The move could lead Standard &
Poor's Corp. to lift its selective default rating on the country.
Near the end of trading the dollar was quoted at Rp 8,740,
down from Rp 8,880 at Friday's close.
The dollar jumped to an intraday high of Rp 8,920 in the
morning session after two bombs in Jakarta over the weekend left
four people injured.
But dollar selling by state banks pulled the U.S. currency's
off its highs. News of the London Club rescheduling pushed the
dollar down even further to close at its intraday low.
The government's official announcement Monday that it was
canceling the auction of its 51 percent stake in Bank Niaga was
widely expected and did not affect rupiah trading, dealers said.
The Singapore dollar was a touch stronger in lackluster trade.
Late in Asia the U.S. dollar was quoted at S$1.7935, compared
with S$1.7940 late Friday.
Dealers said volume was rather light and most trades were done
via brokers with very few interbank calls being made.
The peso overcame some negative economic news to close higher
amid thin demand for U.S. dollars.
The government reported Monday that nonperforming loans in the
country's banking sector remained at a stubbornly high ratio of
18.23 percent in April, up from 18.0 percent in March.
The peso also showed little reaction to Friday's clash between
government soldiers and rebel forces in the southern Philippines
that left two hostages dead.
The dollar closed at 50.560 pesos on the Philippine Dealing
System, down from 50.630 pesos Friday.
The New Taiwan dollar tracked the yen lower. The U.S. dollar
closed at NT$34.164, compared with the previous close of
NT$34.159.
The central bank, which regularly intervenes in currency
markets to prevent the New Taiwan dollar from appreciating too
rapidly, was relatively inactive Monday because of the subdued
nature of trading, dealers said.
The baht also got caught in the yen's downdraft. Late in Asian
trading the dollar was quoted at 42.425 baht, up from 42.330 baht
late Friday.