Asian currencies weaken, yen lower
Asian currencies weaken, yen lower
Alan Yonan Jr., Dow Jones, Singapore
Asian currencies weakened across the board Tuesday, tracking the yen lower in the absence of any significant domestic developments to drive trading.
Gains on Wall Street overnight helped the dollar strengthen against both the yen and euro during Asian hours and kept other currencies in the region under pressure.
"It was more of a dollar/yen story than anything," said Emmanuel Ng, currency strategist at Bank of Tokyo-Mitsubishi. "There were no clear domestic positives or negatives that really stood out."
In New York Monday, the Dow Jones Industrial Average rose 1.7 percent and the Nasdaq Composite Index advanced 3.2 percent.
In Asia, the initial euphoria about the prospects for an economic recovery that inspired a rally in many regional currencies has now been pretty much priced into the market, Ng said.
The euphoria will have to be backed up with an actual increase in Asian exports to keep the regional currencies on an upward trend.
The key question now is whether the economic recovery underway in the U.S. will be strong enough to generate the demand for Asian exports necessary to make that happen, Ng said.
The dollar's advance Tuesday pushed it up to 128.35 yen in late Asian trading, up from 127.78 yen late Monday in New York. The euro was quoted at US$0.9061, down from $0.9114 in New York.
However, the dollar will have a difficult time gaining much further in the near term amid concerns over the large U.S. current account deficit and the strength of the U.S. recovery, analysts say.
The South Korean won got caught in the yen's downdraft, but found some support from exporters and foreigners selling the dollar.
The dollar finished at 1,279.3 won, up from Monday's five- month closing low of 1,277.4 won.
Foreigners bought a net 16.5 billion won worth of shares in the local stock market Tuesday, helping keep a floor under the won.
The New Taiwan dollar was marginally weaker in rangebound trading, but analysts remained bullish on the local currency due to the island's economic growth potential.
The U.S. dollar ended at NT$34.579, up from Monday's NT$34.550. It traded in a range of NT$34.566 and NT$34.585.
The Taiwan government is slated to announce gross domestic product for the first quarter Friday and many economists are looking for the economy to post its first gain after two straight quarters of contraction.
The Singapore dollar also lost ground on the back of the weaker yen.
Late in Asia the U.S. dollar was quoted at S$1.8070, up from S$1.8035 late Monday. It traded between S$1.8030 and S$1.8075.
Trade remained relatively thin, with market participants still uncertain about the U.S. dollar's longer-term prospects.
The stream of remittance inflows from Filipinos working overseas wasn't strong enough to keep the peso from slipping for the first time in three sessions.
The dollar closed at 49.600 pesos on the Philippine Dealing System, up from 49.505 pesos Monday.
The peso's decline was cushioned by a lack of corporate demand for dollars, and a large U.S. pension fund's reversal of an earlier decision to divest from the Philippines.
Against the Thai baht the dollar was quoted at 42.885 baht late in Asia, up from 42.840 baht late Monday.
The Indonesian rupiah was a touch weaker, with the dollar quoted at Rp 9,270 rupiah, compared with Rp 9,275 late Monday.