Asian currencies strengthen, focus stays squarely on rupiah
Asian currencies strengthen, focus stays squarely on rupiah
HONG KONG (Dow Jones): Asian currency traders had attention focused squarely on a stronger Indonesian rupiah again Tuesday, although earlier buying gave way later to selling as cautiousness tempered underlying bullish sentiment.
Other regional currencies moved in sympathy with the rupiah, particularly the Thai baht, which had a brief go at important support levels before losing steam later in the day. The South Korean won also got some support from gains in the local stock market Tuesday.
Anticipation of a cabinet reshuffle in Indonesia and hopes for a more productive relationship between President Abdurrahman Wahid and his Vice President Megawati Sukarnoputri have driven the rupiah to highs not seen in over three months.
The U.S. dollar grappled back from session lows around Rp 8,065, to end the day at about Rp 8,120. But that's still well below the Monday close of Rp 8,219.
After the morning rally, London traders came into the market to buy up some of the U.S. dollars and curtail its fall against the Indonesian currency, said a dealer with U.S. bank.
Another trader in Singapore said: "People had oversold and no one dares to be overly optimistic toward the rupiah." That and a bit of quick profit taking saw the U.S. dollar climb back, he argued.
Wahid will issue a presidential decree Friday empowering Megawati to take a more active role in government, including chairing the weekly cabinet meetings, Indonesian government officials said Monday.
And most probably on Thursday, the Indonesian President will unveil a pared-down new cabinet that is expected to include a number of senior lawmakers from Megawati's Indonesian Democratic Party of Struggle, or PDI-P.
The Thai baht was also in demand earlier Tuesday, mostly because of the rupiah's gains, but it retreated in late afternoon trade. Late in Asia, the dollar was quoted at 40.735 baht, down from 40.855 baht late Monday.
The second dealer said the market tested supports at 40.70 baht, where big domestic buying interest came in to stop the slide of the U.S. currency.
Against the Philippine peso, the U.S. dollar was quoted at 44.87 pesos, down from 44.96 pesos late Monday.
Traders said the market shrugged off reports that several banks operating in Philippines are suspected of having violated foreign exchange trading rules.
The Singapore dollar was also stronger in late Tuesday trading, with the U.S. dollar at S$1.7152, down from S$1.7166. But the U.S. unit has good support at S$1.7150 for now and isn't expected to break that level soon.
Investment sentiment in South Korea, meanwhile, was boosted after Finance Minister Jin Nyum said the government plans to stabilize the money market before a holiday Sept. 11 - Sept. 13 in an effort to ease liquidity shortages at local companies.
Help also came from the sale of a 6.1 percent stake, or 12.71 million shares, in Hyundai Motor Co. held by Hyundai Group founder Chung Ju-yung.
South Korean shares ended up 2.2 percent as a result, and that helped push up the won. The U.S. dollar was trading at 1113.5 won, down from 1114.50 won late Monday.
The U.S. dollar finished at NT$31.077, up from NT$31.069 late Monday. Taiwan's markets were closed much of the day and will likely remain so Wednesday as Typhoon Bilis heads for island.