Asian monies pare loss, SARS to buoy economies
Asian monies pare loss, SARS to buoy economies
Bloomberg, Singapore
Asian currencies pared losses on trader speculation the containment of the deadly SARS virus, which had prompted governments to slash growth forecasts and consumers to hold back on spending, will buoy economies.
The Singapore dollar was little changed at S$1.7308 against its U.S. counterpart after falling as much as 0.4 percent. The Thai baht held at 41.72 after sliding 0.3 percent, according to Bloomberg data. The regional currencies had fallen after U.S. President George W. Bush said he supports a "strong dollar".
The World Health Organization last week removed Singapore from its watch list for SARS-affected areas. Taiwan, which has the world's third-highest number of infections, reported four more cases of the disease, its fewest in almost a month.
"The worst is over for Asia in the sense that SARS has got better, so for the dollar to rally significantly in Asia is quite difficult," said Peter Soh, managing director of spot foreign exchange at DBS Group Holdings Ltd., Southeast Asia's biggest bank.
The South Korean won was little changed at 1,205.40 won after sliding as far as 1,210 won, according to Seoul Money Brokerage Services Ltd. The Philippine peso held at 53.25 peso. It was as weak as 53.34 peso, according to the Bankers Association of the Philippines.
The Taiwan dollar was at NT$34.699 from Friday's NT$34.712.
Overseas demand for Asian stocks also benefited regional currencies.
Money managers outside Thailand bought a net 4.6 billion baht of stocks last week, more than double the amount from the previous week.
Offshore investors have purchased a net $563 million of South Korean stocks since May 28. These fund managers snapped up NT$34 billion of Taiwan's stocks last week, compared with NT$7 billion the week before.
In Indonesia, the rupiah rose 0.2 percent to Rp 8,295 as Coordinating Minister for Economic Affairs Dorodjatun Kuntjoro- Jakti said the government's target of 4 percent economic growth this year is achievable.
The currency may strengthen to Rp 8,250 this week, said Benjamin Widjaja, a treasury and foreign exchange trader at PT Bank Mizuho Indonesia.
Kuntjoro-Jakti also said the currency's 8 percent gain this year is "a bit of a concern". Currency gains erode the profits a nation's exporters earn on overseas sales. The comment fell short of what's needed to derail the rally, analysts said.
"Domestic factors in Indonesia are still good," said Jan Lambregts, head of Asia Pacific research at Rabobank International in Singapore. "I do not get the impression that they're uncomfortable with a slowly appreciating rupiah." The rupiah may rise to Rp 8,000 in one to two months, Lambregts said.