Asian currencies mostly down in late trade
Asian currencies mostly down in late trade
SINGAPORE (Dow Jones): Asian currencies were mostly weaker
late Thursday after regaining some lost ground following an
upgrade in Thailand's sovereign credit rating by Moody's
Investors Service Inc., dealers said.
The dollar pulled back after muscling its way through key
resistance levels against some of the regional currencies in
early trading. Profit-taking in the U.S. currency set in, and
subsequently accelerated when Moody's lifted Thailand's ratings
from "junk" status to investment grade, dealers said.
"The market was looking for an excuse to lock in profits (in
U.S. dollars) and the Moody's upgrade came in handy," a dealer at
a Japanese bank said.
At the start of the Asian trading day, the dollar's run-up to
above the 8,700 rupiah level - which had proved a tough level to
crack in recent weeks - had sparked U.S. dollar buying against
the Singapore, Thai and Philippine currencies.
The early selloff in the rupiah was triggered by the
Indonesian attorney-general's detention of central bank Governor
Sjahril Sabirin for 20 days for his alleged involvement in the
Bank Bali scandal.
Senior Deputy Governor Anwar Nasution, who took over formally
Wednesday as central bank governor hours after Sjahril was put
behind bars, warned "the detention could affect efforts to
maintain economic and monetary stability."
Nasution's remarks rattled investors, prompting Indonesian
Senior Economics Minister Kwik Kian Gie to say Thursday he's
"optimistic" the central bank can continue to perform its role of
maintaining monetary policy despite Sjahril's detention.
The parliament, however, backed Sjahril, saying he could only
resign if found guilty. The chairman of Indonesia's upper House
of Representatives, Amien Rais, added his voice Thursday to the
chorus protesting Sjahril's detention, saying it tantamount to
political intervention.
Profit-taking in dollar positions fueled by Moody's ratings
upgrade on Thailand and unverified rumors of dollar-selling by
Indonesian state-banks around Rp 8,700 had, however, capped the
U.S. currency below that level, dealers said.
In late trading, the dollar was at Rp 8,680, up from Rp 8,645
late Wednesday. The dollar hit an intraday high of Rp 8,720 early
Thursday, a level last seen around mid-May.
"The political storm is just beginning and the dollar could
very well soon be testing the year high of Rp 8,740," said
Syetarn Hansakul, an economist at West LB Research.
The Thai baht's rally following the Moody's upgrade proved to
be short-lived as offshore players bought dollars when the U.S.
currency retreated against the Thai currency, dealers said.
Immediately after the rating boost, the baht appreciated to
around 39.100 baht, from 39.240 baht earlier in the day. In late
trading, the dollar had regained its strength to 39.205 baht, up
from 39.175 baht late Wednesday.
Against the Singapore dollar, the U.S. currency broke the
S$1.7350 resistance level to S$1.7355. The U.S. dollar had
touched an intraday high of S$1.7362 early Thursday on strong
corporate demand for the U.S. currency and on the rupiah's slide,
but pulled back, especially after the baht surged.
Besides being weighed by strong corporate U.S. dollar demand,
the Philippine peso wasn't spared from the regional volatility
either.
The dollar closed at 42.870 pesos on the Philippine Dealing
System, up from Wednesday's close of 42.830 pesos, but down from
its intraday high of 42.980 pesos.
Bucking the weak trend, the New Taiwan dollar ended stronger
amid foreign fund inflows, as the local stock market surged 1.6%,
and on U.S. currency sales by exporters, said dealers.
The U.S. dollar closed at NT$30.778, down from NT$30.817
Wednesday.
In Seoul, the dollar finished at 1,118.80 won, down slightly
from Wednesday's close of 1,119.10 won in lackluster trade.