Asian foreign exchange rates down, rising oil prices cited
Asian foreign exchange rates down, rising oil prices cited
Dow Jones, Singapore
Most Asian currencies weakened modestly Tuesday as rising oil prices and negative sentiment toward the yen underpinned the U.S. dollar in the region.
Crude oil prices hit a six-month high of US$26.88 a barrel overnight on the New York Mercantile Exchange on fears that tensions in the Middle East could disrupt supplies.
Adding to upward pressure on crude prices during Asian trading hours were comments by foreign ministers from Iraq and Iran that oil would be a potent weapon in pressuring the U.S. to force Israel out of Palestinian areas.
The ministers spoke at a meeting of the 57-member Organization of the Islamic Conference being held in Kuala Lumpur to discuss terrorism.
Saudi Arabia and other Gulf Cooperation Council states have resisted such calls in the past, but Arab frustration with U.S. policies that are seen as favoring Israel has deepened as Israel has stepped up its military response to a wave of suicide bombings.
Higher crude prices tend to have a negative impact on the currencies of oil importing countries because crude is priced in U.S. dollars.
If a country's oil consumption remains constant while prices are rising it must convert more of its currency to U.S. dollars to settle its oil purchases.
The Thai baht, which has fallen around 1 percent over the past two weeks, continued its slide.
Near the end of Asian trading the U.S. dollar was quoted at 43.730 bath, up from 43.600 bath late Monday.
The U.S. dollar got off to a poor start against the yen, but gained ground later in the session as concerns about Japan's economy increased selling pressure on the local currency.
Late in Asia the U.S. dollar was quoted at 133.42 yen, little changed from 133.43 yen late Monday in New York. The dollar was at 133.35 yen late Monday in Tokyo.
The rupiah slipped as corporations took advantage of the U.S. dollar's recent slump against the local currency to stock up on the U.S. unit at a favorable exchange rate.
Near the end of Asian trading, the dollar was quoted at Rp 9,800, up from Rp 9,760 a day earlier.
The rupiah rallied against the dollar in recent weeks on increased investor confidence regarding government privatization and debt restructuring efforts.
In Seoul, importer U.S. dollar-buying and poor yen sentiment kept the South Korean won on the defensive.
The U.S. dollar closed at 1,329.0 won, up from Monday's close at 1,327.5 won.
The New Taiwan dollar ended little changed as central bank intervention offset the positive impact of foreign equity inflows.
The U.S. dollar closed at NT$35.005, compared with the previous close of NT$35.002.
The Philippine peso edged lower, weighed down by corporate demand for U.S. dollars that had accumulated over the long holiday weekend, traders said.
The dollar closed at 51.140 pesos on the Philippine Dealing System, up from 51.000 pesos Monday.
The Singapore dollar ended a touch higher after trading in a narrow range throughout the session.
Late in Asia the U.S. dollar was quoted at S$1.8470, compared with S$1.8475 late Monday.