Asian monies mixed, rupiah extends rally against dollar
Asian monies mixed, rupiah extends rally against dollar
SINGAPORE (Dow Jones): Asian currencies were mixed late Tuesday, with the Indonesian rupiah's continued rally to a six- month high against the U.S. dollar earlier in the day catching many in the market off guard, dealers said.
But the lingering euphoria over the dramatic political events in Indonesia failed to inspire the currencies of its Southeast Asian neighbors, which continued to be dogged by recession concerns and the added political uncertainty in Thailand, dealers said. The Singapore dollar, the Thai baht and the Philippine peso were all weaker against the U.S. dollar.
The Indonesian currency market continued to welcome the peaceful transition of power to the more popular Megawati Soekarnoputri, following the impeachment of former President Abdurrahman Wahid last week.
Enhancing the market's optimism was Standard & Poor's decision to revise its outlook on Indonesia's long-term sovereign credit ratings to stable from negative, dealers said.
Stop-loss dollar sales, which were triggered when the U.S. currency dropped below Rp 9,600, accelerated the dollar's slide, hammering it to as low as Rp 9,375 in afternoon trade, dealers said.
But with the market caught short on dollars, the U.S. currency recouped the bulk of its losses to finish Tuesday's Asian day at Rp 9,525, still significantly lower than Rp 9,700 late Monday.
Caution also prevailed as participants awaited details on the new cabinet lineup, expected to be unveiled in the coming week, dealers said.
Though some in the market are still keen to go long in the rupiah, market watchers are doubtful if the recent rally will last.
"It's pricing in a lot of the good news and it won't be sustainable near term," said Thio Chin Loo, a regional currency strategist at BNP Paribas.
The Japanese yen's consolidation, following the pounding it suffered Monday, helped lift the Singapore dollar, the South Korean won and the New Taiwan dollar off their morning lows, dealers said.
After shooting up to as high as 125.37 yen in New York overnight, the dollar eased to below 125.00 yen in Asia on profit-taking, which set in after the Tokyo Stock Exchange's benchmark stock index rebounded from Monday's 16-year lows.
At 1015 GMT (5.15 p.m. Jakarta time), the dollar was quoted at 124.87 yen, below 125.10 yen late Monday in New York.
Against the Singapore dollar, the U.S. currency resumed its upward trend, following its sharp correction recently.
The U.S. dollar was at S$1.8026, higher than S$1.8012 late Monday.
The South Korean won received additional support from a 1.5 percent rise on the local equity market and traditional month-end dollar sales by local exporters, dealers said.
The dollar finished at 1,300 won, down from Monday's close of 1,303.5 won.
Pent-up demand for the New Taiwan dollar by exporters needing to meet month-end payments bolstered the local currency, dealers said. Taiwan's financial markets were closed Monday due to a typhoon.
The U.S. dollar closed at NT$34.759 Tuesday, down from NT$34.767 Friday.
On the Philippine Dealing System, the dollar rebounded, with some banks rebuilding their positions unwound late Monday, as fears of imminent foreign exchange restrictions to curb speculation against the peso subsided, dealers said.
The dollar closed at 53.540 pesos, up from 53.370 pesos Monday.
The Thai baht was marginally weaker in lackluster trade, with participants clinging on to their long-dollar positions amid uncertainty ahead of the Constitutional Court's long-awaited verdict on Prime Minister Thaksin Shinawatra's assets concealment case, dealers said.
The dollar was quoted at 45.715 baht, a touch higher than 45.700 baht late Monday.