Most Asian currencies edge slightly higher, rupiah weak
Most Asian currencies edge slightly higher, rupiah weak
HONG KONG (Dow Jones): A barrage of verbal interventions
backed by dollar purchases executed by state-run banks took some
of the recent shine off the South Korean won Tuesday, forcing the
currency lower on the day.
Trading activity elsewhere in the region was muted, with most
Asian currencies edging slightly higher in tightly range-bound
markets.
Southeast Asian currencies ended local trading hours mostly a
touch higher, despite an early selloff in the rupiah.
Sentiment toward the Indonesian currency continued to suffer
from the weekend's speculation that cabinet minister General
Wiranto may be given his marching orders, potentially
precipitating a military coup.
The market's mood was further clouded by news that religious
unrest had spread to the island of Lombok and reports of
demonstrations by dispossessed farmers on the island of Bintan,
which neighbors Singapore.
In response the dollar was bid up to touch Rp 7,300, only to
ease back again after encountering firm offers at that level.
With dollar-buying interest seen at levels between Rp 7,150
and Rp 7,200, the U.S. currency is expected to range tightly
against the rupiah over the short term.
Late in Asia Tuesday, the dollar was quoted at Rp 7,262, down
slightly from Rp 7,278 the previous day.
Meanwhile, from Seoul, repeated comments from the South Korean
finance ministry triggered a wave of dollar short-covering
against the won Tuesday, as the Seoul authorities stressed they
don't want to see a sharp rise in the local currency.
South Korea's newly appointed Minister of Finance and Economy
Lee Hun-jai indicated on Friday that the government would in
future be less inclined to intervene in the foreign exchange
market to suppress the currency.
Lee's remarks, reported in the Korean press, sparked heavy won
buying by local and international market participants which on
Monday carried the won to its highest level since November 1997.
The rally prompted finance ministry officials to repeat
warnings Tuesday morning that the government remains prepared to
intervene to damp excessive market volatility.
Those threats were lent further weight later Tuesday by
reports that Lee had said there was no sound reason for the won's
abrupt appreciation.
Lee's efforts to talk down the won, backed by dollar-buying
from the state-run Korea Development Bank, proved effective
Tuesday.
By the end of local trading the dollar had been driven up to
1,127.00 won, from 1,121.00 won at Monday's close.
Elsewhere in North Asia, the New Taiwan dollar ended the day
flat, as U.S. dollar purchases executed by the central bank
offset local currency buying by foreign investors.
At the Taipei close, the U.S. dollar was at NT$30.837,
compared with NT$30.835 the day before.
With little news to guide the market, trading in the Singapore
dollar and Thai baht was led by activity in the rupiah Tuesday.
After being bid up to a high of S$1.6750 against the Singapore
currency, the U.S. dollar slipped to end Asian hours at S$1.6714,
down from S$1.6742 late Monday.
Against the baht, the dollar eased to 37.365 baht, from 37.425
baht the previous day.
In Manila, the Philippine peso bucked the regional trend,
ending lower in relatively light trading.
At the close, the dollar was at 40.605 pesos, compared with
40.564 pesos the day before.