Asian currencies mostly up, further gains expected
Asian currencies mostly up, further gains expected
Nirmala Menon, Dow Jones, Kuala Lumpur
Most Asian currencies continued to rally Tuesday, as confidence in the U.S. dollar wavered amid the steady stream of U.S. corporate accounting controversies.
Asian currencies once again took their cue from the yen, which was supported after Japanese Finance Minister Masajuro Shiokawa once again made comments that gave the impression he is resigned to further U.S. dollar weakness. Tuesday, in an effort to explain previous remarks, Shiokawa said, "I meant to say that as there is speculation that the dollar will fall (to 115 yen), we must stop it from going there."
The comments appeared to support notions in the market that Japan has drawn a line in the sand at 115 yen, which could give speculators room to push the dollar lower from around 118.30 yen late Tuesday in Asia, down from 118.57 yen late Monday in New York.
The dollar's decline pulled it lower against most Asian currencies, although the Indonesian rupiah bucked the region-wide trend, falling due to strong dollar demand from local corporations preparing to pay back loans denominated in the U.S. currency.
The Korean won chalked up a new 19.5-month high on the back of the yen's gains and on remarks by a presidential advisor. Lee Ki- ho, special adviser to President Kim Dae-jung for economy, labor and welfare, was quoted on Internet news site Edaily as saying that the government's principle is "having market forces dictate" currency levels.
Those comments helped push the dollar to an intraday low of 1,181.9 won, and the U.S. currency ended at 1,182.2 won, down from 1,191.4 won Monday, its lowest closing level since closing at 1,176.9 won on Nov. 22, 2000.
Meanwhile, the Singapore dollar was also stronger, briefly reaching its highest level since late September. The U.S. dollar ended the session at S$1.7600, down from $1.7625 late Monday, after touching an intraday low of S$1.7589 in early trade, its lowest level since Sept. 24, 2001.
Near-term support for the pair is pegged at S$1.7580, with resistance at S$1.7730, traders said.
The Thai baht hit a new 22-month high at the close of spot trading due to stop-loss dollar selling after the U.S. currency fell below key support, traders said.
The dollar ended the bumpy day at its intraday low of 41.30 baht, down from 41.45 baht Monday's close.
"The greenback dropped to 41.33 baht in the morning, but then staged a brisk rebound to 41.41 baht within 10 or 20 minutes," said a trader at a foreign bank, "A U.S. bank seemed to be behind that quick swing," he said, adding that the dollar later surrendered those gains.
The dollar also fell against the Philippine peso, slipping to 50.290 pesos from 50.470 pesos. Traders said some banks sold the U.S. currency on an expected break in the Senate leadership impasse, with the administration likely to clinch a majority in the Upper House.
The New Taiwan dollar's upward momentum remained intact, helped in part by a widening of Taiwan's trade surplus to US$1.65 billion in June from US$1.60 billion in May.
The Taiwan central bank, which regularly intervenes to stave off fluctuations in the local currency, bought around US$350 million throughout the day, traders said.
Participants said they expect the New Taiwan dollar to test NT$33.200 on Wednesday, though much may depend on the yen's movements. The dollar closed at NT$33.380, from NT$33.513 Monday.
The Indonesian rupiah once again bucked the regional trend as local companies accumulated dollars.
"Although they don't have to pay offshore debts immediately, some local companies apparently want to cover their dollar needs on concerns that the political climate will heat up," ahead of next month's annual session of the country's highest legislative body, a dealer said.
The dollar was quoted at Rp 8,910 late Tuesday, from Rp 8,900 Monday.