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.