Asian monies weaker, hostage to yen and rupiah
Asian monies weaker, hostage to yen and rupiah
SINGAPORE (Dow Jones): Asian currencies declined against the
U.S. dollar late Thursday, caught between the vagaries of the
rupiah and the yen.
Regional currencies embarked on their downward trend late
Wednesday in sympathy with the rupiah, and the yen's slide
against the dollar in Asian trading Thursday ensured they would
remain in their new lower ranges against the U.S. dollar,
analysts said.
The U.S. dollar surged above 110 yen for the first time in
five months after Moody's Investors Service Inc. said it has
placed Japan's local currency rating on review for possible
downgrade.
And with traders saying the dollar is likely to push higher to
112 yen in the coming week, the much-anticipated rally in Asian
currencies won't be panning out in the near term, currency
watchers say.
The Singapore dollar is perhaps the most hapless of the lot,
contending with the mercurial political situation in Indonesia on
the one hand and the more prosaic limits of its trade-weighted
index on the other.
The U.S. dollar is quoted at S$1.7047 late Thursday, higher
than S$1.7008 late Wednesday.
"Three currencies are working to push the Singapore dollar
around: the yen, the euro, and the rupiah," said Steven Brice,
treasury economist at Standard Chartered. "Between the three of
them, the Singapore dollar will struggle to trade below S$1.70
against the U.S. dollar."
The U.S. dollar could cross the S$1.7100 level next week, he
added.
The rupiah remains volatile as Indonesian political
uncertainty refuses to abate, despite the peaceful removal of
Gen. Wiranto from the presidential Cabinet and higher-than-
expected fourth quarter economic growth.
"The outlook still remains clouded," said Mangal Goswami, vice
president of economic research at ABN AMRO. "Investors are not
fully convinced that the political and social instability has
been completely addressed."
The U.S. dollar is quoted at Rp 7,415 late Thursday, stronger
than Rp 7,375 late Wednesday.
"The rupiah will stay pretty volatile in the near term until
the entire political picture is more clear," Goswami said.
The South Korean won also weakened against the U.S. dollar
late Thursday, this time without any help from central bank.
The U.S. dollar is trading at 1,128.7 won late Thursday,
higher than 1,123.35 late Wednesday.
Current account data showing a US$400 million trade deficit in
January, together with the yen's weakness, managed to push down
the won, which monetary authorities have been trying to weaken in
recent weeks with verbal as well as actual dollar-buying
intervention.
The Thai baht, the Philippine peso, and the New Taiwan dollar
also have all declined against the U.S. dollar.
The U.S. dollar is quoted at 37.720 baht late Thursday, higher
than 37.580 baht late Wednesday.
It closed stronger 40.573 pesos late Thursday, compared with
40.490 pesos late Wednesday.
The U.S. unit also ended at NT$30.711, up from NT$30.650 late
Wednesday.