Asian monies give up early gains, end mixed against dollar
Asian monies give up early gains, end mixed against dollar
HONG KONG (Dow Jones): Early gains in Asian currencies were whittled away late in regional trading hours to leave regional markets mixed on Monday.
The Thai baht, the Singapore dollar, and the Indonesian rupiah all advanced strongly in early trading, only to succumb to profit-taking later in the day. The Philippine peso also slipped in late trading to end the session lower.
In North Asia the Korean won strengthened modestly, while the New Taiwan dollar ended unchanged.
The dollar's fall against the yen and the euro, impelled by Friday's fall in U.S. equity prices, was the chief reason cited for the U.S. currency's early decline against Asian regional currencies.
"The dollar's bias is to the downside across the board," said Thio Chin Loo, foreign exchange strategist at Banque Paribas in Singapore, as the U.S. currency softened during morning trading.
Nevertheless, the market hesitated to sell the U.S. currency down too aggressively, leading some traders to conclude that any further dollar losses would be limited.
"Regional markets have been led by the baht, but the (dollar against the) baht is looking oversold now," said one trader at a European bank in Singapore.
In early Asian trading the U.S. currency was sold down to test an intraday low against the baht of 39.0800 baht before rebounding as traders bought dollars back again to take profits from their short positions.
Towards the end of Asian interbank dealing, the buying had pushed the dollar as high as 39.3300 baht, higher than 39.2600 baht late Friday.
The U.S. dollar also fell against the Singapore dollar during the Asian morning, although the fear of provoking dollar- supportive intervention by the Monetary Authority of Singapore deterred traders from pushing the U.S. currency below an intraday low around S$1.6720.
With the U.S. currency seen as well supported above S$1.6700, position liquidation lifted the U.S. dollar in afternoon trading, to leave the currency pair quoted at S$1.6754 late in Asian hours, down from S$1.6777 late Friday.
Trading in the peso followed a similar pattern, with the U.S. currency opening down, only to recover to end the session higher, at 40.440 pesos, up from 40.330 pesos at Friday's close.
Rupiah
The rupiah, however, managed to hold onto most of the ground it gained, although it failed to extend the advances made in early trading.
Dealers in Jakarta and Singapore reported interest to buy the local currency coming from offshore players seeking to establish long-rupiah positions in expectation of an extended rally should opposition leader Megawati Sukarnoputri capture the presidency in Wednesday's elections.
The rupiah's gains were limited, however, by firm dollar- buying interest which supported the dollar at Rp 7,800 level.
The dollar ended Asian trading at Rp 7,890 in the spot market, down from Rp 8,050 late Friday in Asia.
Dealers said that rising street protests as well as negative comments from several public figures on Habibie's nomination is expected to put pressure on the members of the nation's highest legislative body, known by its acronym as MPR, not to elect B.J. Habibie on Wednesday.
"Although it's still hard to predict the result, the market sees that Habibie's chance is waning," said a dealer with a local bank.
The wave of dollar offerings, however, were initiated by offshore participants, who brought the dollar to its intraday low of Rp 7,840, dealers said.