Asian monies up, rupiah retreats
Asian monies up, rupiah retreats
Netty Ismail, Dow Jones, Singapore
Most Asian currencies were slightly firmer late Tuesday, as the Japanese yen gained ground after showing a relatively muted reaction to Standard & Poor's downgrade of Japan's sovereign debt ratings.
The yen's moderate gains bolstered the South Korean won, the New Taiwan dollar and the Singapore dollar.
Currencies like the Thai baht, the Philippine peso and the Indonesian rupiah have increasingly decoupled from the yen's fluctuations, said Mansoor Mohi-uddin, a regional currency strategist at UBS Warburg.
With these currencies poised to benefit from an expected recovery in the global economy, their reduced sensitivity to the yen's volatility - and as a result, the less complicated trading strategies needed - has increased their appeal to foreign investors, Mohi-uddin said.
"They can get good returns from these currencies," he added.
Except for the baht - which was slightly firmer in sparse offshore trading - the peso and the rupiah were weaker.
After leaping to seven-month highs Monday, the Indonesian rupiah retreated on short-covering in U.S. dollars and demand for the U.S. currency by corporations, dealers said.
The rupiah edged even lower after the Indonesian Bank Restructuring Agency said late Wednesday that it had short-listed four bidders for a 51 percent stake in nationalized PT Bank Niaga.
Since the rupiah has already priced in this imminent asset sale, participants were locking in profits, dealers said.
"We need some kind of retracement before selling the dollars back," said a Jakarta-based dealer.
Those that made it to the final round in the bidding for Bank Niaga include Australia & New Zealand Banking Corp, a consortium led by Malaysian financial group Commerce Asset Holding Bhd. and two Indonesian-led consortium.
Indonesia is hoping to sell the bank by the middle of this year to help raise money to reduce its huge budget deficit.
Foreign exchange participants - betting on a resumption in the rupiah's advance toward Rp 9,200 to the U.S. dollar in coming weeks - were still looking to sell the U.S. currency on any rally, helping to mitigate the pressure on the Indonesian currency Tuesday, dealers said.
"It looks like the rupiah is still the flavor of the month," said a dealer at a European bank in Singapore. "People are still adding on to their short dollar positions."
At 0845 GMT (3.45 Jakarta time), the rupiah was quoted around Rp 9,450 to the U.S. dollar, weaker than late Monday's level of around Rp 9,380.
The rupiah hit an intraday high of Rp 9,365 early Tuesday, boosted by lingering euphoria over Indonesia's agreement with the Paris Club official creditors to reschedule US$5.4 billion of the country's debt, due during the next 21 months.
At 0950 GMT, the U.S. dollar was quoted at 131.45 yen, down from 131.97 yen late Monday in New York. The U.S. dollar was at 131.70 yen late Monday in Tokyo.
After hitting an intraday high of 132.20 yen in Asia Tuesday, the U.S. dollar's subsequent retreat below 132 yen lifted the currencies of South Korea, Taiwan and Singapore, dealers said.
The New Taiwan dollar strengthened to NT$34.984 against its U.S. counterpart, compared with NT$34.992 Monday.
The Singapore dollar was marginally firmer at S$1.8356 against the U.S. currency, compared with S$1.8361 late Monday.
The baht was at 43.470 bath against the U.S. dollar, compared with 43.505 bath late Monday.
Corporate demand for U.S. dollars weighed on the Philippine peso, which ended at 51.005 pesos to the U.S. currency, compared with 50.965 pesos Monday.