Led by rupiah, Asian monies mostly improve against dollar
Led by rupiah, Asian monies mostly improve against dollar
Shen Hong, Dow Jones, Singapore
Led by the rupiah, Asian currencies were mostly higher against the U.S. dollar late Wednesday, recovering from the previous day's jitters brought on by a bomb blast in the Indonesian capital.
The dollar's slide against the Japanese yen and the threat of central bank intervention also helped regional currencies, notably the Singapore dollar, move higher, observers said.
"The ability of Asian currencies to withstand such an event in Jakarta is a good thing," said Thio Chin Loo, a currency strategist at BNP Paribas in Singapore.
However, Thio was quick to warn that the steadiness in regional units Wednesday "could be a bit artificial because central banks are stepping up vigilance."
Late in Asia, the dollar was quoted at Rp 8,608, down from Rp 8,625 Tuesday.
Although Bank Indonesia has vowed to defend the currency following Tuesday's plunge on the terrorist bombing attack in Jakarta, some observers expect the rupiah to resume heading south in the near future, particularly as political instability could rise ahead of Indonesia's mid-2004 presidential election.
The Singapore dollar also rebounded from a three-month low it hit Tuesday, taking advantage of the spillover impact of a stronger yen. The U.S. dollar was quoted at S$1.7622 late in the session, down from S$1.7640 Tuesday.
The Thai baht, which tends to take its cue from its Singapore counterpart, was unchanged late in Asia, following a brief rebound earlier Wednesday. The U.S. dollar was quoted flat at 42.07 baht, after dipping to an intraday low of 41.96 baht.
The Philippine peso also reversed direction Tuesday, capitalizing on better corporate demand and fears of central bank intervention.
The dollar closed at 54.790 pesos on the Philippine Dealing System, compared with 54.815 pesos Tuesday.
In Northeast Asia, the South Korean won ended the day higher, as foreign investors sold dollars to pay for local stock purchases, but narrowed gains toward the close on suspected government intervention.
The dollar closed at 1,184.6 won, down from 1,187.9 won Tuesday.
Foreign investors were net buyers of 84.3 billion won worth of Korean shares Monday and Tuesday, before turning net sellers Wednesday.
Market participants also suspected the authorities stepped into the market right before the close to support the dollar. The Korean authorities never specifically comment on their activities in the market.
Traders expect the dollar to trade between 1,183 won and 1,190 won Thursday, with any downside limited by the government's clear aversion to a rising won as it tries to keep local exports competitive.
"The market's consensus is that it will be difficult for the dollar-won to fall below 1,180," said a trader at Korea Exchange Bank.
In China, Premier Wen Jiabao's reaffirmation that the country would maintain the basic stability of the yuan exchange rate led to a slide in the one-year yuan nondeliverable forward premium in the offshore market.
Wen's remarks boosted investor confidence that China will continue to resist pressure from its trading partners for a yuan revaluation in the short-to-medium term.
The yen's strength against the U.S. currency also lifted the New Taiwan dollar, sparking a slew of dollar selling from Taiwanese domestic banks.
The U.S. dollar closed at NT$34.446, down from NT$34.466 Tuesday.
The Taiwanese currency often tracks the yen, because the island imports large amounts of goods from Japan and as the two compete in some export categories.
The U.S. dollar is expected to remain steady Thursday between NT$34.42 and NT$34.47, said a dealer at a foreign bank in Taipei.