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.