Asian currencies mostly stronger
Asian currencies mostly stronger
HONG KONG (Dow Jones): The Indonesian rupiah gained ground Thursday on talk the government is considering capital controls, while the won lost some in part on concerns that Korea's chaebol haven't yet overcome their liquidity problems.
The other Asian currencies were mostly stronger during the session and following the rupiah, although the baht also got some support from hope that Moody's Investors Service Inc. will soon upgrade Thailand's credit rating.
"It was the right news at the right time in the right market," said a dealer with a U.S. firm in Singapore, referring to early reports that Indonesian President Abdurrahman Wahid has asked his advisors to look into the possibility of controls on movements of currency in and out of the country.
Such talk spooked players that had been behind a recent surge in the U.S. dollar, and flushed out speculative dollar positions, said the trader. He said the move above Rp 8,700 earlier this week was based on "noise and rumors" as some investors played up the disarray, and a correction was expected.
Market watchers and investors, meanwhile, were also taken aback when International Monetary Fund Managing Director Horst Koehler said Thursday that capital controls shouldn't be a "taboo" subject, in response to a question about what would be discussed when he visits Indonesia.
At any rate market watchers say the Rp 8,300 support for the U.S. dollar looks likely to hold for now and to define the lower end of a fairly broad range for the currency. Thio Chin Loo, Paribas currency strategist, expects continued trade in the range between Rp 8,300 and Rp 8,800.
The Thai baht was also higher, in part just following along with the rupiah and others, said a dealer with a U.S. bank. But he said hopes for an upgrade to Thailand's credit rating also backed the move.
The U.S. dollar was trading at 39.09 baht, down from 39.125 baht late Wednesday.
Moody's Investors Service Inc. will decide by mid-June whether to upgrade Thailand's sovereign credit rating from its current junk status, said a senior analyst with the agency.
The Philippines peso rose to 42.555 pesos to the U.S. dollar, stronger than the 42.649 level late Wednesday.
Against the Korean won, meanwhile, the U.S. dollar was up in part on a report that Hana Bank has provided emergency loans of 85 billion won to Korea Merchant Bank Corp., said traders.
Late in the day the U.S. unit was trading at 1,131.9 won, up from 1,129.40 late Wednesday.
Korea Merchant Banking Corp. said Thursday it has received a loan of 85 billion won in short-term loans from Hana Bank to help it over a temporary liquidity shortage.
The U.S. dollar was trading at S$1.7306, down from S$1.7330. Against the New Taiwan dollar, the U.S. dollar is trading at NT$30.83, little changed from NT$30.81.