Asian monies mixed, market awaits Bush currency talks
Asian monies mixed, market awaits Bush currency talks
Dow Jones, Singapore
Asian currencies were mixed in cautious trading Friday as market participants waited to see what message U.S. President George W. Bush may deliver on exchange rates during his visit to the region.
The South Korean won and New Taiwan dollar strengthened modestly. The Philippine peso and Thai baht weakened, while the Singapore dollar and Indonesian rupiah were little changed.
Although security and counterterrorism are expected to dominate discussions on Bush's six-day sweep through the region, the U.S. president is under pressure from U.S. manufacturers to address what they see as currency manipulation by Asian governments.
Bush will have a chance to broach the subject with Japanese Prime Minister Junichiro Koizumi in Tokyo Friday on the first leg of his journey.
The Japanese government, through the country's central bank, bought a record US$125 billion through the first nine months of 2003 in order to curb the yen's strength against the dollar.
Bush is also expected to raise the issue of currencies when he meets with Chinese President Hu Jintao and other Asian heads of state at the Asia-Pacific Economic Cooperation summit next week in Bangkok.
The impact on currency markets will depend on whether Bush simply reiterates the administration's call for flexible exchange rates or steps up its rhetoric, analysts say.
Foreign flows into the South Korean and Taiwan stock markets bolstered the currencies in both those countries Friday.
Against the won, the dollar closed at 1,172.6 won, down from 1,174.9 won late Thursday in Asia.
Foreigners bought a net 6.1 billion won of South Korean shares, but it wasn't enough to prevent the Korean Composite Stock Index from falling 1.2 percent on the day.
The government was suspected of continuing its effort to support the dollar, buying the U.S. currency via the state-run Korea Development Bank.
The Ministry of Finance and Economy, however, in a statement issued after the market closed Friday denied having actively bought dollars in the foreign exchange market recently. The dollar surged to a six-week high against the won Thursday on a combination of short-covering and suspected government support.
Against the New Taiwan dollar, the U.S. unit closed at NT$33.920, down from NT$33.950 Thursday.
Foreign investors bought a net NT$11.08 billion of shares Friday, according to the Taiwan Stock Exchange. The main index of the Taiwan Stock Exchange ended up 0.1 percent at a fresh 18- month high.
The Singapore dollar failed to gain traction from a government report showing that exports from the city-state in October posted their largest increase in three years.
Late in Asia the U.S. dollar was quoted at S$1.7411, little changed from S$1.7410 late Thursday.
The U.S. dollar opened around S$1.7410, and after an early dip to its session low of S$1.7385, bounced back to S$1.7400- S$1.7410, where it traded through most of the afternoon session.
And in yet another positive sign for the island's economy, the government reported that non-oil domestic exports rose 25.9 percent on year to S$10.5 billion in September.
Security concerns ahead of Bush's visit to Manila this weekend weighed on the peso.
The dollar closed at 54.680 pesos on the Philippine Dealing System, up from 54.660 pesos Thursday.
A threat by Philippine communist guerrillas Friday to attack government forces during the U.S. president's visit Saturday sparked some mild peso selling, a dealer at a local bank said.
Market participants were also wary of selling the dollar before the government announces its nine-month budget deficit Monday. Fiscal concerns have weighed on the peso in recent months.
The dollar gained on the baht after Thailand's finance minister Suchart Jaovisidha said the government might uses taxes to fight speculation on the baht if steps announced earlier in the week didn't work.
The central bank Tuesday imposed restrictions on nonresident deposit accounts with local financial institutions.
"We need to gauge the impact of the central bank measures first," he said. "This takes about a week from when the measures were put in effect."
Near the end of Asian trading the dollar was quoted at 39.965 baht, up from 39.850 baht late Thursday.
Against the rupiah, the dollar was quoted at Rp8,440, unchanged from late Thursday.
The dollar touched an intraday high of Rp8,455 on demand from importers but lost steam as the forthcoming initial public offering of a 36 percent stake in Bank Rakyat Indonesia continued to underpin positive sentiment toward the local unit.