Asian monies mixed on equity flows, intervention fear
Asian monies mixed on equity flows, intervention fear
Dow Jones, Singapore
Asian currencies put up a mixed showing on Thursday supported
by strong equity inflows, but with the central bank intervention
theme a strong deterrent to attempts to take the units too high.
The Singapore dollar, the Philippine peso and the Indonesian
rupiah slipped, while the South Korean won, the Thai baht and the
New Taiwan dollar were modestly higher.
Analysts said central banks in the region are loathe to allow
their currencies to appreciate too fast for fear of losing export
competitiveness at a time of uncertainty for the global economy.
The Singapore dollar fell to a one-month low during the
session, but managed to trim losses. Late in the local session,
the U.S. unit was quoted at S$1.7380, up from S$1.7365 late on
Wednesday.
A trader at a European bank in Singapore said there were a lot
of U.S. names buying the currency pair, continuing a trend seen
in the last few days.
There's been talk in the market in recent days that the
Monetary Authority of Singapore has been supporting the U.S.
dollar, which has damped any enthusiasm to push up the local
unit.
Talk of such intervention seems to be supported by the recent
foreign reserves data, which showed a sharp rise in reserves last
month, analysts said.
The trader said he believes the government wants to weaken the
Singapore dollar to make it more competitive against countries
like neighboring Malaysia, whose currency, the ringgit, is pegged
to the U.S. dollar.
The dollar closed at 53.610 peso on the Philippine Dealing
System, up from 53.535 peso on Wednesday.
Against the Indonesian rupiah, the dollar was quoted around Rp
8,251 late in Asia, up from Rp 8,230 on Thursday.
Market players continued to take profit on the rupiah, which
has rallied sharply in recent weeks, amid concerns the central
bank might intervene to stem the rise.
Analyst said the rupiah is expensive and on a purchasing power
parity basis, its fair value should be closer to 10,000 to the
dollar.
Still, the analyst said continued interest in the high-
yielding currency and the momentum of good news in the country
should help the rupiah rise to Rp 7,500 by September, although it
should then go on to lose ground by year end.
Meanwhile, Bank Indonesia Thursday cut its overnight money
market intervention rate for the second time this month on easing
inflation to help spur economic growth.
The South Korean won edged up despite official jawboning,
although overall activity was quiet as traders believe the
government had already intervened in the previous session to
support the dollar at 1,190 won.
Exporters, foreigners and players fixing non-deliverable
forwards positions all sold the dollar, which closed at 1,193.2
won, down from 1,195.4 won on Wednesday.
The New Taiwan dollar was boosted by foreign equity inflows
which put the U.S. unit ended at NT$34.667, down from Wednesday's
NT$34.682.
The Thai baht recovered from an early drop to move to a
stronger footing. Late in Asia, the dollar was quoted around
41.72 baht, down from 41.79 bahy on Wednesday.