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.