Asian monies end higher on WorldCom jitters
Asian monies end higher on WorldCom jitters
Tom Wright, Dow Jones, Jakarta
The U.S. dollar lost ground against Asian currencies Friday on
further worries over the U.S. economy sparked by a report that
U.S. telecommunications giant WorldCom Inc. may file for
bankruptcy as soon as this weekend.
Jitters over U.S. trade data due later Friday - expected to
show the country's trade deficit remained large in May - and
Thursday's stock market declines in New York, also helped provide
a positive tone for Asian currencies.
Setting the trend for the rest of Asia, the yen continued to
move higher against the U.S. dollar, unfazed by Finance Minister
Masajuro Shiokawa's concerns about the currency's gains.
Asian currency strength ended hopes of a respite for the U.S.
dollar. Those hopes came after the Dow Jones Industrial Average
posted modest gains Wednesday, recovering from seven straight
sessions of declines, and sending the U.S. currency a touch
higher Thursday in Asia.
The DJIA ended 1.56 percent lower Thursday, and is expected to
continue its fall ahead of the weekend after a Wall Street
Journal report Friday about WorldCom.
A bankruptcy filing by the U.S.'s No. 2 long-distance provider
would mark a new low point in the company's staggering fall from
grace. Last month, WorldCom disclosed it had improperly accounted
for US$3.9 billion in operating expenses to hide losses.
"The dollar still faces major headwinds," said Peter Redward,
a currency strategist with Deutsche Bank in Singapore.
Against the South Korean won, the U.S. dollar was trading in
late Asian trade at 1,171.5 won, down from 1,174.8 won late
Wednesday.
The U.S. dollar was at NT$33.019 against the New Taiwan
dollar, up from NT$33.007 at midday, but down from NT$33.040 at
Thursday's close.
Taiwan's central bank intervened in the market, which helped
cushion the U.S. currency's fall, traders said.
Both South Korea and Taiwan compete with Japan for export
markets and want to see a weaker dollar to help exporters and
economic growth.
South Korean President Kim Dae-jung's remarks that rapid moves
in the won's rate are undesirable as they hurt exporters failed
to move the market, which remains dollar bearish.
The U.S. dollar traded intraday at its lowest level against
the Singapore dollar since the Sep. 11 terrorist attacks, traders
said.
In late trade, the U.S. dollar was quoted at S$1.7302, down
from S$1.7423 late Thursday in Asia, but up from an intraday low
at S$1.7287.
The Monetary Authority of Singapore wasn't active in the
market Friday, traders said.
In Indonesia, local traders focused more on domestic factors,
pushing the U.S. dollar down to close at Rp 8,800 versus Rp 8,885
Thursday ahead of expected inflows for a major government asset
sale.
The Indonesian Bank Restructuring Agency plans to sell Rp 145
trillion in non-performing loans next week, which it hopes will
raise around $2 billion. Analysts say local businessmen who moved
money overseas after the 1997-98 Asian financial crisis might
bring back some of that cash for the auction.
The U.S. dollar ended down at 50.350 pesos in the Philippines
versus 50.380 pesos Thursday, in line with the U.S. currency's
decline against the yen.
Against the Thai baht, the U.S. dollar closed at 40.42 baht,
down from 40.61 baht Thursday.
The U.S. dollar has recovered slightly since falling to a two-
year low Wednesday at 40.24 baht. Thai central bank Governor
Pridiyathorn Devakula said Friday that the central bank hadn't
intervened to effectuate any recovery in the dollar.