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.