Asian monies mostly up, S'pore $ recovers from MAS
Asian monies mostly up, S'pore $ recovers from MAS
The Singapore dollar bounced back strongly on Thursday after a
sharp early fall in the wake of a de facto easing of monetary
policy and weaker-than-expected second-quarter economic data.
South Korea and Indonesia also eased policy, but the moves
produced scarce impact on their currencies. The South Korean won
finished marginally stronger and the Indonesian rupiah was
slightly weaker.
Elsewhere, the New Taiwan dollar, the Philippine peso and the
Thai baht were modestly higher. The central banks of the three
economies had already slashed rates since the U.S. Federal
Reserve's 25-basis-point rate cut last month.
Early on Thursday, the Monetary Authority of Singapore (MAS)
lowered its target for the Singapore dollar by "re-centering" its
trading band for the currency around the current exchange rate -
which is near the bottom of the undisclosed band - while keeping
official policy neutral.
The MAS uses the exchange rate as its primary monetary-policy
tool.
"By re-centering the band and keeping the same width of the
band, they are lowering the potential low point for the Singapore
dollar on a trade-weighted basis, and that is easier policy,"
said Bhanu Baweja, currency strategist with UBS Warburg.
The U.S. dollar unit rose as high as S$1.7608 on the news as
market players took the view that the central bank will tolerate
a weaker currency. But it fell back to S$1.7510 late in Asia,
down from S$1.7552 late on Wednesday.
2. Dollar 2 X 24
U.S. dollar begins
fightback against euro
Dollar begins fightback against euro
The dollar has begun a fightback against the euro, but it
needs a postwar economic bounce if it is to succeed in reversing
a months-long decline, analysts say.
The euro has been pushed back to US$1.1344, down from $1.1581
at the start of this month and a record $1.1933 May 27.
But the single European currency remains at historically lofty
levels.
Last year, the euro advanced 18 percent, breaking above parity
with the dollar for the first time since shortly after its launch
in January 1999 as traders fretted over the U.S. economy -- in
particular a huge shortfall in the U.S. trade and financial
account with foreign countries -- and global tensions.
Now, the balance may be tipping, analysts said.
Citigroup chief currency strategist Robert Sinche said he
expected the euro to decline to $1.10 or lower by the end of this
year.
He noted expectations that the European Central Bank would cut
key interest rates this year, even though ECB president Wim
Duisenberg has hinted there will be no lowering of euro zone
interest rates when bank policymakers next meet July 10.
3. OIL 1 X 50
Oil prices still strong, Saudi fuels supply fears
Oil prices still strong, Saudi fuels supply fears
Oil prices stayed firm on Thursday, supported by concern about
inadequate supplies and the latest signs Organization of the
Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia was
sticking to the cartel's agreement to curb output.
In London, benchmark Brent crude was trading two cents weaker
at US$28.69 a barrel, close to the highest level since just
before the Iraqi war in March, while New York light crude slipped
a cent to $30.87 after closing on Wednesday at a three-week high.
Prices had strengthened on Wednesday after a U.S. government
report showed a modest increase in U.S. crude and gasoline stocks
but left supplies below normal.
"Both technically and fundamentally the market looks well
supported in the short term," said Christopher Bellew of
Prudential Bache brokerage.
"It could be the third or fourth quarter before stocks are
normal again."
The strength of the market was underpinned by news on Thursday
that Saudi Arabia's crude oil term allocations to major oil
companies would be unchanged in August versus the previous month
at 20 to 25 percent below full contractual volumes, according to
industry sources.
After testing maximum capacity during the Iraq war, the OPEC,
led by Saudi Arabia, has kept to a pledge to rein in output.
A Reuters survey found on Monday that production among the 10
OPEC countries with quotas fell by 660,000 barrels per day (bpd)
in June to 25.97 million, not far above an official limit for the
4. ASIA 2 X 20
Asia 'on the way up',
says Ferrero-Waldner
Asia "on the way up", says Ferrero-Waldner
Asia is "on the way up" after its difficulties of recent
years, said Austrian Foreign Minister Benita Ferrero-Waldner said
in an interview published on Thursday.
After the economic crisis of 1997, the world crisis of the
Sept. 11, 2001 terrorist attacks on the U.S., the terrorism in
Bali, and the SARS lung disease epidemic, the nations of the Far
East were turning to Europe again, she told the newspaper
Standard.
Ferrero-Waldner's interview was published during a week with
meetings in Vienna with three Asian foreign ministers, Hassan
Wirayuda of Indonesia, Surakiart Sathirathai of Thailand, and
Tyronne Fernando of Sri Lanka.
"We're always talking about the European Union enlargement
here, but overlook the dynamic development in Asia", she said.
Ferrero-Waldner pointed out that there was 7.7 percent
economic growth in China, seven percent in Vietnam, 6.2 in South
Korea, and five in Thailand last year. Those were figures only
equaled, if at all, by East European candidate-nations for EU
membership.
Ferrero-Waldner drew parallels between European integration
and the quickly-growing linkages among the Asian states. "They're
following the model of the European Union, or at least the former
European Economic Community", she said.
During Surakiart's visit, Ferrero-Waldner described Austria
and Thailand as "gateways for economies and investment in Europe
and Asia".
Thailand, and other large nations such as Indonesia, would
profit from Austrian access to East Europe, she said. She also
spoke of Austria's economic interests in Asia, for instance a 37
percent increase last year in exports to China, and the Austrian
Siemens' manufacture of subway trains for Thailand's capital
Bangkok.
"Asia is big on our map", Ferrero-Waldner commented.