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."