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.