Asian currencies up, dollar totters after rate cut
Asian currencies up, dollar totters after rate cut
Netty Ismail, Dow Jones, Singapore
Asian currencies were higher late Wednesday, as the U.S.
dollar struggled in international foreign exchange markets after
the Federal Reserve slashed interest rates by half a percentage
point to their lowest level in 40 years.
Asian currencies may continue to find reprieve if the U.S.
dollar weakens further to 120 yen, but the downside would likely
be reined in by expectations that the region's economies won't
escape unscathed from the deepening economic quagmire in the
U.S., he added.
At 0747 GMT (2:47 p.m. Jakarta time), the U.S. dollar was
quoted at 121.07 yen, below 121.25 yen late Tuesday in New York.
The U.S. dollar was at 121.60 yen late Tuesday in Tokyo.
Following the Fed rate cut, the narrowed interest rate
differential has made it increasingly unattractive to initiate
and fund short positions in Asian currencies.
In Asia, Taiwan and the Philippines are expected to take the
cue from the Fed and ease rates by the end of the week, while
South Korea - whose economy outshines the rest in the region -
will likely bide its time and lower rates in December, many
analysts said.
The New Taiwan dollar ended at its intraday low of NT$34.520
to the U.S. currency, but still marginally stronger compared with
NT$34.526 Tuesday. The New Taiwan dollar had touched an intraday
high of NT$34.507.
In Seoul, the U.S. dollar finished at 1,292.60 won, down from
Tuesday's close of 1,295.60 won.
In Singapore the U.S. dollar was quoted at S$1.8169, lower
than S$1.8233 late Tuesday.
With the help of suspected central bank intervention, the
Indonesian currency extended the previous day's rebound to trade
around Rp 10,640 to the U.S. dollar Wednesday, compared with Rp
10,800 late Tuesday, dealers said.
Analysts said the rupiah will likely consolidate in a Rp
10,500-Rp 11,000 range in the near term after briefly hitting the
psychologically important Rp 11,000 mark Tuesday.
The Philippine peso found support from seasonal remittance
inflows from overseas Filippino workers, dealers said.
The U.S. dollar ended at its intraday low of 51.880 pesos,
weaker than 51.965 pesos Tuesday.
The Thai currency was slightly firmer at 44.640 baht to the
U.S. dollar, compared with 44.670 baht late Tuesday.
Thai Finance Minister Somkid Jatusripitak reiterated Wednesday
that there was no need for the country to follow the lead of the
U.S. in cutting key interest rates.