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.