Asian currencies mostly down late
Asian currencies mostly down late
TOKYO (Dow Jones): Asian currencies were mostly lower against
the dollar late Monday as most felt a mild drag from a slightly
weaker yen.
The currencies that bucked the trend were the Thai baht, which
rose slightly on the new central bank governor's hints of higher
interest rates, and the rupiah, which firmed as trading volumes
thinned due to an Indonesian holiday.
Late Monday, the dollar was trading at Rp 11,361, down from Rp
11,450 late Friday.
Incoming Thai central bank Governor Pridiyathorn Devakula
confirmed Monday that there would be changes in monetary policy,
by saying that "monetary policy depends on economic conditions
and if conditions change, monetary policy has to be adjusted
too."
Pridiyathorn, giving his first official address since his
appointment by the government last week, stressed that the
changes will be aimed at two main objectives: economic growth and
ensuring the stability of the baht.
In a clear signal that an interest rate hike is forthcoming,
he said that interbank rates should be somewhere between bank
deposit and lending rates. If interbank rates are below deposit
rates, banks are forced to maintain a wide margin between deposit
and lending rates.
Late in Asian trading, the dollar was trading at 45.370 baht,
down from 45.550 baht late Friday.
Most other regional currencies tracked the yen's modest
retreat from its intraday highs against U.S. dollar, drifting
lower in rangebound trading.
Against the Singapore dollar, the U.S. dollar was quoted at
S$1.8132 in late trading, up from 1.8089 late Friday, though
sentiment remained mixed, traders said.
While corporate demand for U.S. dollars and a weaker yen
helped provided support for the U.S. currency, profit-taking kept
it capped around S$1.8150.
The Philippine peso was hurt by the uncertainty about the
hostage situation amid clashes between the military and the
Muslim extremist group Abu Sayyaf, which is holding foreign and
local hostages in a remote southern jungle.
"We never know who is going to be kidnapped next or what will
happen next," said a trader from a foreign bank.
The dollar closed at 50.765 pesos, up from 50.750 pesos last
Friday.
The New Taiwan dollar also ended lower Monday as importers,
offshore players and local banks bought the U.S. dollar, traders
said.
The U.S. dollar closed at NT$34.065, up from Friday's
NT$34.042.
The South Korean won was slightly softer against the dollar
following the yen's retreat. The dollar closed at 1,285.8 won,
against Friday's close of 1,285.4 won.
But overall, "it was a dull market," said Citibank economist
Oh Suktae, with trading stuck between 1,283.0 won and 1,287.0 won
and as the "dollar/yen seems to be the only market factor."
On Monday, the dollar bounced back after an early fall to
Y118.85, boosted by warnings against excessive euro weakness by a
senior Japanese finance ministry official.
Japan's Vice Finance Minister for International Affairs
Haruhiko Kuroda said that the euro is "too weak against the
dollar and the yen" and that falls "aren't justified by current
economic fundamentals."