Intervention forces won down as late buying lifts baht, rupiah
Intervention forces won down as late buying lifts baht, rupiah
HONG KONG (Dow Jones): Verbal intervention coupled with
government-directed dollar buying forced the South Korean won
lower for the second day running on Wednesday.
In Southeast Asia, regional currencies drifted sideways for
most of the session, before a flurry of late dollar sales by
market participants based in Europe pushed the Thai baht and the
Indonesian rupiah up sharply to end the day higher.
The Korean Ministry of Finance and Economy sought to set its
stamp on the day's trading in Seoul by issuing a statement
minutes before the local market's open, declaring that "the won's
appreciation is never desirable."
By the end of local trading in Seoul, the dollar had been
driven up to close at 1,135.00 won, well above 1,133.30 won at
the end of Tuesday's session.
Despite the dollar's advance against the won Wednesday, the
majority of market participants retained their bullish view on
the Korean currency. U.S.-based J.P. Morgan, for example, was
sticking to its year-end exchange rate forecast of 1,100 won.
"That's a very aggressive target," conceded Chia Hsin-Li,
Asian foreign exchange strategist at the bank.
Elsewhere in North Asia, the new Taiwan dollar closed
marginally weaker, with the U.S. dollar edging higher to close at
NT$31.640, compared with NT$31.637 at the end of Tuesday's
session.
In Southeast Asia, regional currencies drifted sideways for
most of the day before a late flurry of buying briefly lifted the
baht and the rupiah.
"We saw some (dollar) selling when Europe opened," explained
one Singapore based broker, saying that market players in London
had sold the U.S. currency against baht, rupiah and Singapore
dollar.
"But these are very thin markets and there are no big amounts
going through. This was just some (dollar) longs selling to take
profits and square off their positions before the end of the
year," he said.
By the time Asian trading ended, the dollar had lifted a
little from its earlier low against the baht of 38.4300 baht to
trade at 38.4650 baht. Late Tuesday, the dollar had been quoted
at 38.5550 baht.
Dealing was unaffected by the no-confidence debate in the Thai
parliament, with most traders assured the government will survive
unscathed.
News that the International Monetary Fund assistance program
to Indonesia suspended in August will be superseded by a new
extended program to run until November 2003 had no impact on
foreign exchange dealings in Jakarta.
Late in the Asian day, the dollar was quoted against the
rupiah at Rp 7,202, down from Rp 7,235 the day before.
Against the Singapore dollar, the U.S. currency closed at
S$1.6790, flat compared with S$1.6787 the day before.
In Manila, the Philippine central bank's decision to raise its
overnight lending rate to 12 percent from 11 percent in
anticipation of increased funding demands over the new year had
little effect on peso trading.
On the Philippine Dealing System, the dollar closed against
the peso at 40.690 pesos, up from 40.665 pesos the day before.