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.