Asian currencies mostly up; reprieve seen as temporary
Asian currencies mostly up; reprieve seen as temporary
SINGAPORE (Dow Jones): Most Asian currencies were higher late
Wednesday, as the yen regained its footing, dealers said.
The Indonesian rupiah ended higher as players unwound long-
dollar positions as most await the outcome of the current
political crisis.
Few investors want to hold large positions until Parliament
impeaches Indonesian President Abdurrahman Wahid at a meeting of
the nation's highest legislative body in August.
Until then, trading is likely to be very thin, dealers said.
The dollar closed at its intraday low of Rp 11,325, down from
its close of Rp 11,380 Tuesday, as players unwound long positions
in the U.S. unit built up over past weeks, dealers said.
But the buoyant mood in the region's foreign exchange markets
failed to lift the New Taiwan dollar. The New Taiwan dollar
closed little changed at NT$34.400 against the U.S. currency,
compared with NT$34.403 Tuesday as central bank intervention kept
the local dollar wedged within a tight trading band, dealers
said.
Analysts said the reprieve for Asian currencies will likely be
transient. Japan's increasingly grim economic outlook and the
sputtering U.S. economy will continue to cast a shadow on the
region, they added.
"Markets are focusing on a very weak external environment for
Asian exports in general, and Asian technology exports in
particular," said David Simmonds, a regional currency strategist
at Salomon Smith Barney/Citibank. "That's one of the reasons why
Asian currencies will remain under pressure for some time."
He added that he will remain "wary of Asian currencies in the
next one to three months."
Though the yen held on to its gains against the dollar
following its rebound late Tuesday in Asia, analysts expect the
Japanese currency to suffer a relapse given the pessimism
surrounding the economy. This would spell gloom for the rest of
the region's currencies, analysts said.
At 0905 GMT (4:05 p.m. Jakarta time), the dollar was quoted at
122.93 yen, flat from late Tuesday in New York. The dollar was at
123.72 yen late Tuesday in Tokyo.
The South Korean won led the advance in Asian currency
markets, despite foreign equity fund outflows from the Seoul
bourse.
The dollar closed at 1,294.9 won, about 0.8 percent lower than
Tuesday's close of 1,304.9 won.
Dollar sales by a foreign bank, believed to be executed on
behalf of a South Korean company, contributed to the won's
advance, dealers said.
Elsewhere, the Philippine currency found solace from dollar
profit-taking, after the peso was bashed down to five-month lows
in recent sessions amid concerns over the protracted hostage
crisis in the south, dealers said.
"The markets got pretty long dollars on the peso's losing
streak, that was unbroken for several days," said Simmonds at
Salomon Smith Barney/Citibank.
Talk of dollar sales by the Philippine central bank also
helped bolster the peso, although central bank Deputy Governor
Amando Tetangco said the authority didn't intervene.
Instead, he attributed the peso's rebound to remittance
inflows, offshore dollar sales and stronger regional currencies.
The dollar closed at 52.010 pesos on the Philippine Dealing
System, down from 52.320 peso Tuesday.
The Singapore dollar was marginally higher at S$1.8177 against
its U.S. counterpart, compared with S$1.8179 late Tuesday.
The Thai currency was slightly stronger at 45.215 baht per
dollar, compared with 45.250 baht late Tuesday.