Asian currencies mixed late, S'pore dollar extends rebound
Asian currencies mixed late, S'pore dollar extends rebound
SINGAPORE (Dow Jones): Asian currencies were mixed late Wednesday, with the market on tenterhooks ahead of Federal Reserve Board Chairman Alan Greenspan's Congressional testimony later in the global day, dealers said.
Market participants are seeking clues on the U.S. economic and policy outlook.
With few signs of an imminent economic recovery in the U.S. so far, the outlook for Asian economies remain grim, and regional currencies are expected to stay depressed in coming weeks, analysts said.
The Indonesian rupiah closed higher Wednesday as the market took heart from talk of a political compromise between embattled President Abdurrahman Wahid and his political opponents.
Wahid appeared to back down from threats to impose a state of emergency and dissolve Parliament.
State bank dollar selling also helped push the U.S. currency to end at Rp 11,285, down from Rp 11,337 Tuesday.
Still, the rupiah's strength Wednesday was limited as political tensions remain high ahead of the scheduled impeachment next month.
The dollar is expected to trade in a Rp 11,250 to Rp 11,300 range Thursday.
Fears of testing the regional central banks' resolve had also tamed dollar bulls, dealers said. Dealers believed most of the region's monetary authorities had intervened in their respective foreign exchange markets earlier this week, as their currencies languished at multi-month, if not multi-year lows.
Indeed, suspected intervention by the local monetary authority contributed to the Singapore dollar's gains, extending Tuesday's rebound.
Speculation that the Monetary Authority of Singapore was consistently selling the U.S. currency all day through a European bank prompted participants to trim their long U.S. dollar positions, dealers said. A local bank was also rumored to be selling U.S. dollars on behalf of the MAS earlier in the day, dealers said.
At 0855 GMT (5:55 p.m. Jakarta time), the U.S. dollar was quoted at S$1.8317, below S$1.8341 late Tuesday.
The Philippine central bank was also believed to have staved off the pressure on the local currency, helping it regain its footing after having earlier in the day weakened past the 54-peso mark to the dollar, dealers said.
In what may be the most aggressive intervention this year, dealers estimated the central bank sold up to $80 million Wednesday to pull the dollar below the key 54 pesos level.
The dollar closed at 53.700 pesos on the Philippine Dealing System, down from 53.950 pesos Tuesday.
Similarly, the New Taiwan dollar recouped its earlier losses as the central bank sold an estimated US$100 million at the last minute to shore up the local currency, dealers said.
The U.S. dollar ended at NT$35.027, slightly lower than Tuesday's close of NT$35.047. Trading volume totaled US$597 million.
Foreign equity fund outflows also dented the South Korean won, although expectations of further foreign direct investment inflows kept a rein on the currency's decline, dealers said.
The dollar finished at 1,311.7 won, marginally higher than +Tuesday's close of 1,311.2 won.
Weighed by the peso's earlier decline, the Thai currency was slightly weaker at 45.785 baht per dollar, compared with 45.755 baht late Tuesday.
Thai central bank Governor Pridiyathorn Devakula said Wednesday he is monitoring the baht's movements to ensure that there's no excess volatility, although he added that the currency's movements aren't considered "too volatile" at the moment.