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.