Asian monies down, uncertainty prompts demand for greenback
Asian monies down, uncertainty prompts demand for greenback
SINGAPORE (Dow Jones): Asian currencies were mostly weaker late Friday as uncertainty over events in Indonesia and other countries prompted investors to stock up on dollars ahead of the weekend.
Economic and political concerns took their toll on the Indonesian rupiah, Thai baht and Philippine peso, which all finished the week at new lows for the year.
"There us a lot of uncertainty heading into the weekend and the market is responding by holding dollars," said Alison Seng, currency strategist at Standard & Poor's MMS.
The rupiah was unable to shake negative sentiment associated with a political battle between President Abdurrahman Wahid and his opponents in parliament.
Late Friday, the dollar was quoted at Rp 9,305, up slightly from Rp 9,290 late Thursday. The rupiah has fallen nearly 35 percent since Abdurrahman took office nine months ago, and some analysts say a further decline to Rp 10,000 in the coming months is not out of the question.
The fall of the rupiah will "undermine Indonesia's outlook in terms of inflation performance, confidence and the ability of the country to service its external debt," Standard Chartered Bank currency strategist Steve Brice said in a research report.
The Thai baht was pressured by strong dollar demand, slow debt repayment by banks and the corporate sector, and political concerns, dealers said.
Late Friday, the U.S. dollar was quoted at 39.705 baht, up from 39.545 baht at the end of the previous session.
Sentiment was damped by worries that the next Thai general election expected this fall could leave a political vacuum that would lead to a slowdown in economic reform, dealers said.
The Philippine peso fell below the key level of 44 pesos to the dollar for the first time in 21 months.
The dollar closed at 44.030 pesos on the Philippine Dealing System, up from Thursday's close of 43.950 pesos.
Traders said the peso tracked the weaker Indonesian rupiah and Thai baht.
Domestic concerns, such as lackluster economic growth prospects, the unresolved crisis in southern Mindanao and weak confidence in the Estrada administration, also continue to hurt the peso.
In South Korea, a threatened strike next week by unionized bank employees put pressure on the won.
The dollar closed at 1,118.80 won, up from 1,117.20 won the day before.
Talks Friday between the government and union leaders ended inconclusively, although the two sides agreed to resume talks Sunday. Bank employees plan to strike Tuesday to protest the government's banking sector reform plans.
The failure of the two sides to reach a settlement spurred local banks to cover short-dollar positions, traders said. Separately, dollar-buying by overseas players in the non- deliverable forward market also pressured the won, traders said.
The Singapore dollar fell victim to the regional demand for U.S. dollars ahead of the weekend, dealer said.
Late in Asia the U.S. dollar was quoted at S$1.7371, up from S$1.7360 late Thursday.
Dealers said there was no sign of intervention by the Monetary Authority of Singapore, even though the U.S. dollar briefly rose above last week's high of S$1.7380 in intraday trading.
However, if the U.S. dollar rises much higher next week, perhaps above a key S$1.7400 level, the MAS may feel compelled to take action, dealers said.
The New Taiwan dollar was unchanged against the U.S. currency Friday as U.S. dollar-selling by the central bank offset downward pressure on the local unit from ailing Taiwan stocks, dealers said. The U.S. dollar closed at NT$30.839.