Dollar falls against euro, yen pushes Asian currencies higher
Dollar falls against euro, yen pushes Asian currencies higher
SINGAPORE (Dow Jones): The dollar's decline against the euro and yen opened the door for a rally in Asian currencies on Thursday, helping the Singapore dollar climb to a two-month high.
The U.S. currency has been losing ground over the past few sessions, particularly against the euro, amid uncertainties about weak corporate earnings and the overall state of the U.S. economy.
Many players in markets like Singapore, who had taken long positions in the U.S. dollar on expectations that it would strengthen, have been forced to liquidate those positions in recent days as the exchange rate moved against them, dealers said.
The triggering of stop-loss orders accelerated the fall of the dollar against it's Singapore counterpart Thursday, pushing the U.S. currency below S$1.80 in intraday trading for the first time in two months.
"People have been cutting their long positions in the globally weak dollar environment," said Simon Flint, a Bank of America currency strategist based in Singapore.
Flint said the recent uptick in the Singapore dollar is temporary and that he expects the U.S. dollar will resume its upward trend in the coming months.
Late in Asian trading the U.S. dollar was quoted at S$1.8041, down from $1.8170 late Wednesday.
The Indonesian rupiah continued to bask in the glow of President Megawati Soekarnoputri's new government.
The rupiah closed slightly higher as the national assembly elected a conservative Muslim leader to the vice presidency.
But the rupiah had to give up most of its earlier gains as local companies snapped up the dollar to repay maturing foreign debts.
After falling to a five-month low of Rp 9,775, the dollar closed at Rp 9,950, down from Rp 10,000 Wednesday.
The market welcomed the assembly's election of Hamzah Haz as the country's new vice president ahead of Golkar's candidate Akbar Tandjung.
The market was concerned that street protests would have become a daily occurrence should Tandjung have been elected as President Megawati Soekarnoputri's deputy.
Meanwhile, Bank Indonesian Governor Sjahril Sabirin said Thursday he expects the rupiah to continue to strengthen as sentiment improves following the smooth political transition in the country.
"I expect the rupiah to continue to strengthen as market sentiment has improved and is getting better," he told reporters.
The Thai baht edged higher, riding the coattails of the strengthening Singapore dollar.
U.S. and European banks sold the dollar against the baht, pushing the U.S. currency to an intraday low of 45.6100 baht. However, the strength was partly offset by corporate demand for dollars, mainly from oil companies, to settle their month-end obligations, traders said.
Late in Asian dealing the dollar was quoted at 45.660 baht, down from 45.750 baht late Wednesday.
The dollar's overnight slip below 124 yen and the Kospi's finish up 0.6 percent helped fuel the won's rise. Sending the won even higher was comments by Minister of Commerce, Industry and Energy Chang Che-shik that the dollar should be trading between 1,200 and 1,250 won.
The dollar closed at 1,298.3 won, down from 1,308.8 won a day earlier.
The story in Taiwan was similar, with the stronger yen and a nearly 4 percent rise in the stock market boosting the local currency to its seventh straight rise.
The U.S. dollar closed at NT$34.786, compared with NT$34.850 Wednesday.
The Philippine peso got swept along with other rising regional currencies. The dollar closed near its intraday low at 53.42 pesos on the Philippine Dealing System, down from 53.60 pesos Wednesday.