Asian monies mixed, better credit outlook lifts won
Asian monies mixed, better credit outlook lifts won
Dow Jones, Singapore
A surprise upgrade of South Korea's credit outlook underpinned the won Friday, while other regional currencies finished Asian trading mixed.
Moody's Investors Service changed its outlook to positive from stable on the sovereign ratings for both South Korea and Thailand, a move that is expected to encourage more foreign investment into those economies.
An improvement in a country's sovereign rating outlook to positive typically precedes an eventual upgrade in the actual rating itself. Moody's long-term foreign currency ratings on South Korea and Thailand are A3 and Baa3, respectively.
Both the won and the baht rallied when the news broke, but the Thai currency later relinquished its gains and finished Asian trading hours weaker.
Elsewhere, the Singapore dollar and New Taiwan dollar strengthened. The Philippine peso weakened to a fresh 15-month low and the Indonesian rupiah was little changed.
Moody's said its decision on South Korea was driven by the country's growing stock of foreign currency reserves and progress made in restructuring the financial and corporate sectors.
The dollar closed at 1,208.6 won, down from 1,211.7 won Thursday.
Moody's said the upcoming presidential election in South Korea provides the government with the opportunity to "refocus its efforts to strengthen its economic policies, institutions and regulatory functions further."
Against the baht, the dollar initially weakened after the Moody's announcement.
The ratings agency applauded Thailand's export growth and ability to attract capital inflows. Both those factors have boosted foreign exchange reserves to make Thailand much less vulnerable to external shocks than previously, Moody's said.
Near the end of Asian trading the dollar was quoted at 43.500 baht up from 43.385 baht late Thursday.
A stock market rally in Taipei helped the New Taiwan dollar snap a three-session losing streak.
The U.S. dollar ended at NT$34.710, down from Thursday's NT$34.736. Trading volume totaled US$444 million, up slightly from US$426 million in the previous session.
Dealers said foreign exchange inflows associated with a 3.2 percent rise in the main stock index was the key reason behind the New Taiwan dollar's strength during the session.
The Philippine peso weakened slightly, finishing at a 15-month low against the dollar for the second straight session.
The dollar closed at 53.375 peso, compared with 53.370 peso Thursday. It was the dollar's strongest finish since 53.450 peso Aug. 3, 2001.
The Singapore dollar strengthened marginally after some banks unwound U.S. dollar positions ahead of the weekend.
Late in Asia the U.S. dollar was quoted at S$1.7628, down from S$1.7665 late Thursday.
The rupiah was caught between suspected capital inflows and dollar demand from local companies paying maturing offshore debts.
The dollar was quoted at Rp 9,035 in late trade, slightly above Rp 9,025 late Thursday.
The increase in the dollar merely reflected the premium in the spot market exchange rate associated with the longer settlement time because of the weekend, traders said.
The market reacted little to the news that the nation's economy grew 3.9 percent on year in the third quarter because the figure was within expectations.