Asian currencies mostly down late, Peso continues slide
Asian currencies mostly down late, Peso continues slide
Dow Jones Singapore
The Philippine peso extended losses on Wednesday, a day when most Asian currencies moved to a weaker footing.
The peso closed at a four-month low on continued fallout from the weekend's failed mutiny by junior army officers that has reignited security concerns in the Philippines.
The Singapore dollar, South Korean won and New Taiwan dollar were weaker in the wake of the yen's overnight losses, although those currencies remained within narrow trading ranges against the U.S. unit. The Indonesian rupiah and Thai baht bucked the sessions' trend to close stronger.
The dollar closed at 54.700 pesos on the Philippine Dealing System, up from 54.670 pesos on Tuesday. Apart from security concerns, month-end corporate demand for the dollar, especially from oil firms, weighed on the peso, traders said.
Central Bank Governor Rafael Buenaventura said the monetary authority didn't intervene to support the peso during the session.
Analysts said the weekend's events have raised the political risk premium on the Philippines, especially with presidential polls due in May 2004.
J.P. Morgan Chase Bank noted Buenaventura said on Tuesday that the peso would recover to the 53-pesos level in the fourth quarter of 2003.
"However, we feel that the macropolicy environment will become increasingly politicized ahead of the 2004 election," said J.P. Morgan Chase Bank, which forecasts the dollar to trade to at least 56 pesos by year-end.
Elsewhere, dollar sales by local exporters helped cushion the South Korean won's fall, traders said.
The dollar ended at 1,180.0 won, up from 1,178.7 won Tuesday.
Some traders suspect the government entered the market via state-run banks near the session close to lift the dollar above the 1,180 won mark.
Against the Singapore dollar, the U.S. unit was quoted at S$1.7558 late in Asia, up from S$1.7528 Tuesday.
Investors bought the U.S. currency to cover short positions built up in recent sessions. The buying gathered pace midafternoon, led by local banks, but profit-taking then set in to take the U.S. unit off highs, traders said.
The rupiah reversed early losses to close stronger. The dollar ended at Rp 8,510, down from Rp 8,610 Tuesday.
Dealers said the rupiah's recovery was likely due to capital inflows linked to the sale of a further 20 percent stake in nationalized Bank Danamon Indonesia.
They suspect foreign investors bought rupiah to settle payment for the Bank Danamon shares with the Indonesian Bank Restructuring Agency.
The agency is raising around Rp 1.3 trillion from the sale, with half the amount coming from foreign investors.
Against the New Taiwan dollar, the U.S. unit closed at NT$34.400, up from NT$34.380 at the previous close.
The Thai baht was stronger. Traders said sentiment on the currency remained bullish due to the country's strong economic fundamentals.
Unless the dollar breaches 42.10 baht, the U.S. unit will likely head south, a Singapore trader said.
Late in Asia, the dollar was quoted at 41.97 baht, down from 42.01 baht on Tuesday.