Asian monies mostly down, economic worries drag Singapore dollar
Asian monies mostly down, economic worries drag Singapore dollar
Nirmala Menon, Dow Jones, Singapore
Most Asian currencies retreated Tuesday as their upward momentum was halted by market players covering short-dollar positions following the U.S. unit's mild gains against the yen early in the session.
The Singapore dollar was weighed down by Trade and Industry Minister George Yeo's comments Monday that he isn't ruling out the possibility of a double-dip recession for the city state, traders said.
At 09.42 GMT (4.42 p.m. Jakarta time), the U.S. dollar was quoted around S$1.7637, down from $1.7566 late in Asia Monday.
Yeo's remarks came a week before the government is due to issue a detailed survey of the country's third-quarter economic performance.
The government is widely expected to trim its full-year growth forecast to between 2 percent and 3 percent, from the current 3 percent to 4 percent.
Singapore's GDP expanded a surprisingly soft 3.7 percent on year in the third quarter, but contracted 10.3 percent on an annualized quarter-on-quarter basis, according to advance estimates issued last month.
For the most part, regional currencies took their cue from the dollar/yen movements, traders said.
The dollar rose against the yen early in Asia on short- covering spurred by further threats of yen-selling intervention by Japanese authorities and hopes that Iraq will accept a UN resolution on weapons inspectors before the Friday deadline.
Still, concerns about the health of the U.S. economy and the implications of a sharp slowdown or a recession on trade- dependent Asian countries continues to grip market sentiment, especially after the Federal Reserve's bigger-than-expected 50- basis-point rate cut last week.
That rate cut was the main factor that has driven most regional currencies higher in recent days as market players hunted for better yields.
But "generally, the outlook suggests Asia should not be better off if the U.S. goes into a double-dip (recession). (So) people are not too confident shorting the dollar/regional in a big way," said Philip Wee, market strategist at Singapore's DBS Bank.
Markets are now waiting for Fed Chairman Alan Greenspan's views on the economy when he testifies before the Joint Economic Committee of Congress Wednesday, as well as a slew of U.S. economic data to be issued this week.
Elsewhere, the dollar was quoted around 43.12 versus the Thai baht, up from 42.96 baht late Monday.
The New Taiwan dollar fell after the central bank slashed its key interest rates by a wider-than-expected 25 basis points late Monday.
The U.S. dollar ended at its intraday high of NT$34.565, up from NT$34.415 Monday.
In South Korea, the dollar also ended at its intraday high of 1,206.0 won, up from a two-month trough of 1,201.0 won Monday, as importers covered short positions following the U.S. currency's early gains versus the yen.
The dollar also closed at its intraday high of 53.270 peso on the Philippine Dealing system, up from 52.960 peso Monday, as banks covered short positions.
The Indonesian rupiah bucked the trend to close higher boosted by the Indonesian Bank Restructuring Agency allegedly exchanging dollars for the local currency, dealers said.
The dollar ended at Rp 9,085, down from Monday's close of Rp 9,145.
Dealers said progress on investigations into last month's bombings in Bali also helped keep the dollar on a softer tone against the rupiah.