Asian monies mostly up, rising with yen
Asian monies mostly up, rising with yen
Netty Ismail, Dow Jones, Singapore
Most Asian currencies were stronger late Tuesday, as the
Japanese yen's continued recovery offset the market's somber
contemplation over the prospects of a U.S. economic recovery,
observers said.
The yen's rise gained momentum after China issued its
strongest warning yet over the yen's recent downdraft to three-
year lows.
At 0900 GMT (4:00 p.m. Jakarta time), the dollar was quoted at
131.20 yen, below 132.01 yen late Monday in New York. The yen hit
a new three-year low of 133.40 yen last Wednesday.
The Singapore dollar surged as market participants trimmed
their long U.S. dollar positions, triggering stop-loss orders
along the way, dealers said.
"There was long-liquidation by U.S. and U.K. funds," said a
dealer at a European bank.
He warned, however, that the selling in the U.S. currency was
overdone, and could provoke intervention by the Monetary
Authority of Singapore.
The central bank has, however, appeared to tolerate the
currency's movements - at least for now.
"Based on the Singapore dollar trade-weighted index, it seems
to me that the Singapore dollar is a bit too strong," the dealer
said.
The U.S. dollar skidded to S$1.8253, down sharply from
S$1.8383 late Monday.
The Thai baht's gains lagged behind those of the Singapore
dollar and yen.
There were suspicions that the Thai central bank was checking
the baht's strength, in part to maintain the competitiveness of
the country's exports, dealers said.
Dealers believe the Bank of Thailand has been buying dollars
daily since late last week via a Japanese bank in Singapore.
Late in the day, the dollar was fetching 43.870 baht, down
marginally from 43.900 baht late Monday. For most of the day, the
dollar traded above 43.900 baht - a level that the central bank
appeared to have supported in recent sessions.
On the Philippine Dealing System, the dollar ended at 51.255
pesos, down from PHP51.345 Monday.
Bucking the trend in the region, the South Korean won
succumbed to heavy foreign equity fund outflows, dealers said.
As the won's movements decoupled from the yen's, the Japanese
currency recovered above the psychologically important 10.00 won
mark for the first time in a week. The dollar was fetching 10.05
won late Tuesday, up from 9.94 won late Monday.
Against the U.S. dollar, the won finished at 1,316.9 won,
weaker than Monday's close at 1,312.3 won.
Foreign investors dumped some KRW294.2 billion in shares,
sending the benchmark stock index reeling by 3.4 percent to a
close of 718.64 points, its lowest finish since the end of last
year.
Market participants who had bought currencies like the won, on
hopes that the country is well-positioned to gain from a U.S.
economic rebound, unwound their positions as such optimism faded,
observers said.
"There was an unwinding of these reflation trades that were
put on at the end of last year and early this year," said Mansoor
Mohi-uddin, a regional currency strategist at UBS Warburg.
U.S. Federal Reserve Chairman Alan Greenspan's cautious
comments on the economy at the end of last week served as a
reality check on the market, dashing hopes for a speedy U.S.
economic recovery.
In his downbeat assessment on the U.S. economy, Greenspan had
emphasized the risks to growth and corporate profits.
Adding to the somber mood in Seoul's markets, South Korean
Finance and Economy Minister Jin Nyum said Tuesday that it would
be difficult for the country to see a genuine recovery in exports
and capital investment during the first half of 2002, according
to Yonhap News Agency.
But he added that the government will nevertheless seek to
attain a "reasonable" economic growth rate in the first half
through fiscal and financial policies.
The Indonesian currency was steady around 10,390 rupiah to the
dollar, compared with 10,400 rupiah late Monday.