Asian currencies mostly down on yen's sharp drop
Asian currencies mostly down on yen's sharp drop
SINGAPORE (Dow Jones): The floundering Japanese yen late
Friday dealt a further blow to most Asian currencies, already
staggering under the weight of their countries' economic and
political woes, market watchers said.
The only currency which bucked the downtrend was the Thai
baht, which rebounded on liquidation of long dollar positions
late in the day, after having been dragged down by the yen's
weakness in early trading.
The dollar broke above Y118.00 for the first time in 18 months
Friday as growing pessimism toward the Japanese economy
encouraged yen selling. Strong signals by Japanese monetary
officials welcoming a weaker yen also provided the greenlight for
the currency's decline.
Around 0755 GMT (2:55 a.m. EST), the dollar was at Y118.13,
after having come off from its intraday peak of Y118.25, the
highest since July 22, 1999.
The South Korean won and the New Taiwan dollar felt the brunt
of the yen's weakness. The two currencies usually track the yen
since their economies compete in similar export markets.
In Seoul, the dollar edged up to 1,281.10 won, from Thursday's
close of 1278.10 won.
Against the New Taiwan dollar, the U.S. currency was at
NT$32.699, up from NT$32.635 Thursday.
In Southeast Asia, the Indonesian currency, which has been
recently marginalized in offshore currency markets, will likely
come under assault next week as political temperatures are
expected to rise.
Fears that rumored antigovernment protests next week could
turn violent weighed on the rupiah, although dollar-selling by
state banks helped the Indonesian currency recover from its
intraday low of Rp 9,650 against the dollar, dealers said.
Parliament Monday resumes its probe of two financial scandals
linked to President Abdurrahman Wahid, which might renew fears of
impeachment and in turn, roil the rupiah.
The graft trial of Bank Indonesia Governor Sjahril Sabirin,
due to begin next Wednesday, is also making investors cautious,
dealers said.
Late in the day, the dollar was at Rp 9,608, up from Rp 9,588
late Thursday.
"We will see Rp 9,750 to Rp 9,800 by the end of the month,"
said a dealer at a European bank.
The slump in Asian foreign exchange markets cast a pall on the
Singapore dollar and the Philippine peso.
Against the Singapore dollar, the U.S. currency was at
S$1.7342, up from S$1.7338 late Thursday.
On the Philippine Dealing System, the dollar closed at 51.59
pesos, higher than 51.325 pesos Thursday.
After failing to make headway above 43.600 baht, participants
unwound their long dollar positions ahead of the weekend, helping
the Thai currency regain its footing, dealers said.
Bank of Thailand Friday ruled that financial institutions
selling foreign currency for repayment and servicing of clients'
foreign debt will be required to obtain written evidence from the
clients of the loans and terms.
This provided the market with an excuse to lock in their
profits, after pushing down the baht in the past two days,
dealers said.
The dollar eased to 43.415 baht, from 43.525 baht late
Thursday.