Asian currencies up on relief from oil, euro
Asian currencies up on relief from oil, euro
SINGAPORE (Dow Jones): Most Asian currencies were stronger
late Monday, finding some reprieve from a retreat in oil prices
and the Group of Seven leading industrial nations' resolve to
bolster the euro, dealers said.
However, the yen's gains and other domestic anxieties, which
have unnerved investors for months, kept a rein on the Asian
currencies' gains, dealers said.
With the dollar remaining resilient, most Asian currencies
were wedged in narrow trading bands for the rest of the day,
after their strong rebound at the start of the Asian trading day
stalled by midmorning.
"The (dollar's) pullback hasn't been that significant in Asian
time," said David Simmonds, a regional currency strategist at
Salomon Smith Barney.
While the latest developments have alleviated the short-term
risks in Asian foreign exchange markets and will likely provide
some short-term support, the outlook for Asian currencies remains
bleak, analysts said.
"There are other regional macro and other micro-country issues
still to consider," Simmonds said.
Bucking their regional counterparts, the Philippine peso and
Indonesian rupiah were weaker.
The rupiah slipped to Rp 8,838 from Rp 8,805 against the U.S.
currency late Friday on dollar-demand from local banks, dealers
said.
Players remained guarded over the possibility of a renewed
challenge to President Abdurrahman Wahid's hold on power, dealers
said. The Indonesian parliament will summon Wahid over the
sacking of the country's police chief and his decision to swear
in the deputy police chief over the weekend, dealers said.
On the Philippine Dealing System, the dollar ended at an all-
time low of 45.165 pesos, up slightly from Friday's close of
46.155 pesos. The dollar had fallen to an intraday low of 46.030
pesos, but recovered after regional currencies gave up their
earlier gains.
In contrast, the South Korean won and the Thai baht, which had
been recently bruised by worries about expensive oil prices,
found solace from the relief in energy markets.
The dollar lost about 1 percent to 1,122.20 won, from Friday's
close of 1,134.60 percent.
Market participants had toned down their bearishness toward
the Thai baht after it failed to break below 43 baht support
level to the dollar following the euro-supportive intervention
and the pullback in oil prices Friday.
Strong onshore corporate demand, which emerged around 42.50
baht against the dollar, provided a floor for the U.S. currency
Monday, dealers added.
Around 0905 GMT, the dollar was at 42.660 baht, down from
42.945 baht late Friday.
U.S. President Bill Clinton's move last Friday to release oil
from the country's strategic reserve softened oil prices, which
had hit 10-year highs last week.
Separately, the weekend pledge by G-7 leaders to act against a
weaker euro has bred fears for a new round of euro-supportive
intervention, after the grouping caught currency players off
guard Friday with a round of joint buying of the euro against
major currencies, dealers said.
The euro was quoted at $0.8787, up marginally from $0.8784 in
New York late Friday but well below Friday's intraday high of
$0.9040.
The Singapore dollar directly benefited from the euro's
rebound, currency watchers said. The euro is believed to have a
significant weighting in the trade-weighted basket of currencies
that the Monetary Authority of Singapore uses to guide the local
dollar.
Against the Singapore dollar, the U.S. currency was at
S$1.7468, down from S$1.7523 late Friday, before the euro-
supportive intervention.
In Taipei, support from the euro and oil prices as well as
month-end local dollar demand from exporters and fears of
intervention from Taiwan's central bank lifted the New Taiwan
dollar, dealers said.
The U.S. dollar closed at NT$31.272, down from Friday's near
nine-month high of NT$31.295.