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.