Asian Currencies Mostly Dn Late;Off Lows On Taliban News
Asian Currencies Mostly Dn Late;Off Lows On Taliban News
SINGAPORE (Dow Jones): Most Asian currencies wavered late Tuesday, but were off their intraday lows as the dollar lost ground against the yen following reports the ruling Taliban had urged Afghans to prepare for a holy war against the U.S. should it attack.
"The markets are nervous about a war," said a dealer at an Asian bank.
The Taliban is shielding suspected terrorist Osama bin Laden, the prime suspect in last week's attacks that devastated the World Trade Center in New York and the Pentagon in Washington.
Earlier in the day, the dollar found solace from a flurry of interest rate cuts overnight by several of the world's most influential central banks. Their resolve to stabilize the markets and protect the global economy helped calm nerves in foreign exchange markets.
The U.S. Federal Reserve initiated the coordinated policy easing, slashing interest rates by half a percentage point to 3 percent. The European Central Bank, which also lowered interest rates by half a percentage point, was among the other major central banks that followed suit.
The Bank of Japan is widely expected to announce Tuesday - a day ahead of its original schedule - an easing of its already ultra-loose monetary policy.
Still, the dollar remains wobbly, amid concerns over a possible recession in the U.S. and uncertainty over the nature and scope of U.S. military retaliation against the perpetrators of the terrorist attacks, currency watchers said.
The Singapore dollar was weaker at S$1.7364 against its U.S. counterpart, compared with S$1.7325 late Monday.
The relative strength of the Singapore dollar against the currencies of its major trading partners stoked fears of central bank intervention, especially after the Business Times newspaper reported Tuesday the Monetary Authority of Singapore is ready to act if U.S. financial markets deteriorate following last week's terrorist attacks.
The Indonesian rupiah closed lower Tuesday as the markets ignored a 50-basis-point cut in U.S. rates, focusing instead on local company's demand for dollars to repay debt.
The dollar was quoted between Rp 9,520 and Rp 9,560 late Tuesday, much higher than Rp 9,310 to Rp 9,340 Monday.
Bank Indonesia sold about $30 million to $50 million through brokers in the market to try and help the rupiah, but to no avail, according to Jakarta-based bankers.
In the Thai currency market, unconfirmed talk by some dealers that Bank of Thailand had bought dollars below 44 baht Monday through its agent banks in Singapore kept the U.S. currency supported.
The baht was weaker at 44.225 baht to the dollar, compared with 44.010 baht late Monday.
In Seoul, the dollar finished at 1,296.9 won, down from 1,298.7 won Monday.
Oil importers in South Korea continued to buy dollars to hedge, amid fears of a spike in oil prices, especially if the U.S. retaliates for the attacks against an oil-producing country or region, dealers said. South Korea is a net importer of oil.
On the Philippine Dealing System, the dollar closed at 51.370 pesos, up from 51.260 pesos Monday.