Asian currencies mixed late, won down on economic worries
Asian currencies mixed late, won down on economic worries
SINGAPORE (Dow Jones): Asian currencies were mixed late Friday as uncertainties continued to discourage trading in the wake of Tuesday's terrorist attacks in the U.S.
While Asia's foreign exchange markets remained at a virtual standstill for the third consecutive day, the South Korean won succumbed to growing worries that a crippled U.S. economy may hammer the export-dependent North Asian country, dealers said.
Otherwise, risk aversion prevailed, with interbank participants continuing to refrain from trading. Whatever transactions that needed to be executed were done through brokers and electronic brokers.
"The issue of settlement risk and event risk continues to paralyze the market," said a dealer at a European bank.
Market players were hesitant to hold any major positions before the weekend, amid jitters of a possible retaliation by the U.S. against the perpetrators of Tuesday's terrorist attacks in Washington and New York, and fears of a collapse in U.S. stocks when trading resumes, expected Monday, dealers said.
"If the weekend passes without any major developments - no retaliation on the part of the U.S., no second wave of attack on U.S. targets - then we'll see a few more sessions of lull," said a dealer at a U.S. bank.
"But hopefully, when the U.S. stock markets reopen Monday, we'll see some form of life springing back into the foreign exchange markets," he added.
The won was the biggest mover, as the local bourse plunged by 3.4 percent and onshore participants scrambled to buy dollars, dealers said.
The dollar finished at 1,296.3 won, up from Thursday's close of 1,290.6 won.
The South Korean government said Friday that the country's economic recovery, which it had earlier expected to recover in the fourth quarter of this year, will likely be delayed as the U.S. and other major economies sink deeper into a quagmire.
To revive the economy, the government said it will take emergency measures, including speeding up the formation of its supplementary budget of 5.1 trillion won, and keeping interest rates low by flexibly adjusting issues of Treasurys and other government bonds according to market conditions.
Fears of reprisals in the Middle East, which could disrupt global oil supplies, have supported oil prices, and worries that they might spike higher had prompted onshore participants - especially oil importers - to snap up dollars, dealers said.
The belief that the South Korean government would favor a weaker won - in its bid to boost flagging exports - also contributed to the currency's fall, said Suktae Oh, a Seoul-based economist at Citibank.
He said the dollar will likely trade between 1,290 won and 1,305 won next week.
The Indonesian rupiah closed unchanged in thin trading Friday as investors remained on the sidelines until U.S. markets reopen next week.
The dollar was quoted between Rp 9,100 and Rp 9,130 late Friday, unchanged from Thursday.
The New Taiwan dollar closed little changed at NT$34.575 against its U.S. counterpart, compared with NT$34.579 Thursday, in dealings valued at US$432.5 million.
The New Taiwan dollar had earlier strengthened on U.S. dollar sales by exporters and retail participants, but relinquished its gains as the central bank bought over US$300 million to curb the local currency's rise, dealers said. The U.S. dollar had touched an intraday low of NT$34.530.
On the Philippine Dealing System, light corporate demand for dollars dominated trading, dealers said.
The dollar closed at 51.300 pesos, little changed from 51.280 pesos Thursday.
The Thai currency was slightly stronger at 44.245 baht per dollar, compared with 44.300 baht late Thursday.
Thai Prime Minister Thaksin Shinawatra said Friday that the government will lower its economic forecasts due to the terrorist attacks in the U.S., but added that it "will not make major revisions."
The Singapore dollar was stable at S$1.7377 against the U.S. currency, compared with S$1.7375 late Thursday.