Asian monies end down on N Korea talks failure, SARS
Asian monies end down on N Korea talks failure, SARS
Dow Jones Jakarta
Concerns over North Korea's nuclear weapons program drove down the South Korean won on Friday, as other Asian currencies also ended lower as fears over the mystery SARS virus gripped the region.
Three-day talks in Beijing between Washington and Pyongyang aimed at cooling tensions on the Korean peninsula ended in failure on Friday as a senior U.S. official said North Korea claimed to have nuclear weapons and threatened to test, export or use them depending on U.S. actions.
The U.S. dollar ended at 1,238 won, sharply higher than 1,220 won at Thursday's close, on fears of the conflict with North Korea escalating. South Korean stocks plunged 3.7 percent to their lowest finish since April.
"The breakdown of the talks really hurt the South Korean won, of course," said Simon Flint, senior currency strategist at Bank Of America.
The New Taiwan dollar also ended markedly lower on Friday on yen weakness sparked by the release of rising Japanese jobless figures in March, and due to concerns over the spread of SARS, or severe acute respiratory syndrome.
SARS fears also pushed down currencies in Singapore, Thailand, and Indonesia, while in the Philippines, concerns over economic fundamentals, sparked by Standard & Poor's sovereign ratings downgrade Thursday, continued to dominate negative sentiment toward the peso.
Although Taiwan hasn't yet reported any SARS death, the U.S. dollar jumped to NT$34.942, up from NT$34.856 at Thursday's close.
Investors are concerned that Taiwan's economy - which relies on China as a manufacturing backyard - will suffer from SARS even if the island isn't directly hit. Taiwanese stocks ended down 3.2 percent Friday to a fresh six-month low.
There have been 261 reported deaths worldwide from SARS, the majority in China and Hong Kong, but actual numbers could be much higher, experts say.
Against the Singapore dollar, the U.S, unit ended higher at S$1.7829 versus S$1.7775 as the city state's death total from the virus rose to 19. Authorities there have enforced a strict quarantine procedure, but fears of further infection remain high.
In Thailand, the dollar finished at 42.865 baht, up from 42.760 baht.
Against the Indonesian rupiah, the U.S. currency closed at Rp 8,740, slightly higher than Rp 8,730.
In the Philippines - which confirmed its first two SARS deaths Friday - the dollar ended at 53.00 pesos from 52.795 pesos as players focused mainly on concerns over the country's economic fundamentals sparked by a sovereign ratings downgrade.
Standard & Poor's Corp. earlier this week cut the sovereign rating to BB from BB+, citing the government's growing debt burden.
The agency added in comments to Dow Jones Newswires on Friday it's concerned that inefficient tax collection might mean the country will overshoot a 2003 budget deficit target of 4.6 percent of gross domestic product.