Asian monies fall, won at 5 month low
Asian monies fall, won at 5 month low
Dow Jones, Singapore
The Korean won ended at a five month trough and the Philippine
peso dived to yet another historic closing low as most Asian
currencies weakened in tandem with the yen Wednesday.
North Korea tensions and accounting scandals at SK Global
weighed on the won while domestic security concerns and fears of
a war in Iraq again took a toll on the peso.
A currency trader in Singapore said most central banks in the
region were in the markets, "just to smoothen things out, nothing
too major."
He suspected that some U.S. investment houses were selling
part of their investments in the region because of renewed
security concerns in the Philippines, and the North Korea
tensions.
The won gave up all the previous day's gains and ended at the
intraday low of 1,245.0 won to the dollar, from 1,229.9 won
Tuesday.
A last flurry of dollar buying sent the U.S. currency soaring
about seven won in the final minutes of the session as market
players dared to test higher and higher levels in the absence of
intervention.
Very vague and unconfirmed rumors that North and South Korea
exchanged gunfire Wednesday supported the dollar and underpinned
the uneasy and cautious feelings of many market participants.
However, there were no reputable media reports of any such
incident.
"I don't think it (the rumor) is true. If that rumor were
real, it would be a big emergency," said a dealer. "Many people
are nervous and are making things up."
Chong Hui Chin, a currency strategist at J.P. Morgan Chase
Bank, said some people believed that beyond Iraq, "North Korea
could be a big wildcard in the geopolitical perspective."
But she said the bank still believes the issue will be
resolved diplomatically though "in the meantime, we don't
discount more provocations from North Korea." That should put a
floor under the dollar/won, she added.
Meantime, foreign selling of stocks in the last two days over
the SK Global woes also translated into dollar buying in the
foreign exchange market.
Prosecutors Tuesday said they uncovered 1.55 trillion won of
accounting irregularities at the trading company.
Rising military tension on the Korean peninsula also weighed
on the New Taiwan dollar, dealers said.
The U.S. unit ended at NT$34.721, up from NT$34.620 Tuesday.
The intraday range was between NT$34.639 and NT$34.727.
The Philippine peso extended losses to finish at a new all
time closing low as companies hedged dollar requirements and
banks built up their holdings of the U.S. currency.
The peso ended at 55.099 to the dollar on the Philippine
Dealing System, wiping out the previous record closing low of
54.900 pesos reached on Tuesday.
Traders said the market is focused on a March 17 deadline set
by the U.S. for Iraq to disarm, or face war.
Locally, traders are bracing for more violence as latest
reports from southern Philippines said authorities detonated
explosive devices in Davao, the site of last week's deadly
bombing.
The Singapore dollar slipped to a three-week low Wednesday as
local banks covered short U.S. dollar positions as the U.S. unit
rose against the yen, dealers said.
The aggressive buying again fueled speculation that local
banks were snapping up U.S. dollars on behalf of the Monetary
Authority of Singapore, although most dealers said that was
unlikely.
"Across the board U.S. dollar short covering has been
influential today, but Singapore dollar has also depreciated of
its own accord this week," Bank of America said in a research
note.
Near the end of local trading hours, the U.S. dollar was
quoted at S$1.7463, up from S$1.7362 late Tuesday, but slightly
off the intraday high of S$1.7467, which was its strongest level
in three weeks.
The intraday range of S$1.7380-S$1.7467 was the widest so far
this month.
The Thai baht weakened in line with its regional counterparts
and was quoted at 42.68 baht to the dollar late in Asia, from
42.46 baht Tuesday.
The Indonesian rupiah was quoted at Rp 8,892 to the dollar,
compared with Rp 8,885 Tuesday.