Blast hits rupiah, other monies up
Blast hits rupiah, other monies up
Dow Jones, Singapore
Most Asian currencies kicked off the week on a stronger note, although the Indonesian rupiah was jolted by a bomb explosion in the country's parliament building.
But the rupiah's weakness was largely a knee-jerk reaction to the bombing and the currency managed to pare most of its losses and end the session just slightly lower.
The Philippine peso was weaker, but the South Korean won, the Singapore dollar, and the New Taiwan dollar eked out gains. The baht was also stronger in offshore trading but local financial markets were closed for a holiday.
Dealers said activity in regional currency markets was generally muted ahead of U.S. Federal Reserve Chairman Alan Greenspan's testimony. Greenspan is scheduled to speak before the House of Representatives Tuesday and before the Senate Wednesday.
"Most market participants expect Greenspan to perform two miracles: talk up growth and equities; and flatten the yield curve by dampening any expectations of near-term rate hikes," RBC Capital Markets Senior Currency Strategist Monica Fan wrote in a research note late Monday.
She said that if Greenspan has to choose between those two objectives, markets are betting he will "opt to continue to underwrite the equity market," and that should support the dollar this week provided economic data and second-quarter corporate earnings support such optimism.
The dollar spiked to an intraday high of Rp 8,235 on news of the bomb explosion in the Indonesian Parliament building, but closed the session at Rp 8,225, slightly stronger than Rp 8,220 Friday.
There were no casualties in the incident, which came just days after police arrested nine Islamic militants they said were planning fresh terror attacks.
Dealers said sentiment for the rupiah remains underpinned by continued inflows of capital into the country.
Bank Mandiri's stellar performance on its Jakarta Stock Exchange debut Monday signaled growing investor confidence in Indonesia.
The South Korean won closed higher for the fifth straight session on continued foreign buying of local shares, but was capped by intervention fears.
The dollar ended at 1,176.3 won, down from Friday's 1,178.2 won.
"We are all afraid of government intervention as the market is going down to its (most recent) lowest level... We're afraid 1,176 won is bottom and they (authorities) will unwind," said a Seoul-based trader.
Some market players suspected the government intervened during the session via state-run banks when the dollar fell below 1,177 won, but this couldn't be confirmed.
The Philippine peso was driven to a two-week low on corporate demand for the dollar, which ended at an intraday high of 53.545 pesos from 53.440 pesos Friday, marking its highest close since June 27.
A 1.1 percent fall in the local stock market over a possible management change at heavyweight San Miguel Corp. didn't have any impact on the peso. But if the stock market falls further it may start weighing on the currency, traders said.
Against the Singapore dollar, the U.S. unit was quoted at S$1.7540 late in the local session, down from S$1.7568 Friday.
The New Taiwan dollar was buoyed by a local stock market rally and strength in the yen, though the central bank bought the U.S. currency to slow the local unit's rise, dealers said.
The U.S. dollar ended at NT$34.376, down from Friday's NT$34.400.
One dealer at a foreign house said the central bank likely bought at least US$100 million during the session to offset
Elsewhere, the dollar was quoted around 41.50 against the Thai baht in offshore trading, down from 41.64 baht at Friday's local close.