Most Asian currencies firm
Most Asian currencies firm
SINGAPORE (Reuters): Most Asian currencies remained firm but
were off their highs in late yesterday trade as the Singapore
dollar subsided after the country's 1998 budget failed to deliver
any major tax cuts.
But traders were reluctant to commit themselves aggressively
due to possible weekend developments, including an ASEAN finance
ministers meeting in Jakarta expected to address the proposal of
using regional currencies for intra-ASEAN trade.
"We could see totally different levels when we come in on
Monday so I don't think people want to carry positions over the
weekend," a U.S. bank dealer in Singapore said.
The U.S. dollar's decline against the yen and gains in several
Asian stock markets following Wall Street's bullish performance
helped regional currencies stay on positive ground.
The Singapore dollar slipped back through the 1.62 level to
the U.S. dollar in thin overseas markets as Finance Minister
Richard Hu concluded his budget speech without any mention of a
widely-sought corporate tax cut.
The Singapore dollar reached early highs of 1.6100/10 to the
U.S. dollar on stop-loss U.S. dollar sales sparked by
expectations of a pro-business budget.
It was also lifted by Deputy Prime Minister Lee Hsien Loong's
comment that the Monetary Authority of Singapore (MAS) would
maintain confidence in the domestic dollar by intervening in
foreign exchange markets when necessary.
Lee told parliament fears of a sharp fall in the rupiah
dragging down the Singapore dollar were hypothetical at this
stage and "the weight of the rupiah in our basket is small".
Talk of MAS intervention kept the Singapore dollar from
strengthening through the 1.61 level in early trade, but dealers
said it was likely to target the 1.60 level soon.
The Malaysian ringgit tracked its neighbor's moves,
benefiting further from gains in Kuala Lumpur stocks and news the
government was raising the ceiling on foreign share ownership in
telecommunications companies.
The Indonesian rupiah rose through the 9,000 per dollar level
on U.S. dollar sales by U.S. investment houses in the wake of the
Singapore dollar's early rise.
But dealers said worries about unrest ahead of the
presidential elections and uncertainty over Indonesia's plans to
stabilize its rupiah via a currency board system would limit
gains to the 8,500 level.
The Thai baht made way for investor and corporate dollar
demand after failing to firm above the 42.50 per dollar level.
Dealers said the market was largely unmoved by economic data
showing a $1.03 billion trade surplus and a $1.18 billion current
account surplus for December.
The Philippine peso firmed with its regional counterparts and
as foreign funds flowed into stock and fixed income markets. The
central bank said it was planning to cut banks' reserve
requirements by three percentage points and raise liquidity
reserves by the same amount to nudge bank lending rates lower.
In north Asia, the Taiwan dollar ended firm on the yen's
strength and confidence over the appointment of new central bank
governor Perng Nai-fan, known for his tough stance against
speculators.
The South Korean won finished above the psychological 1,645
level to the dollar on month-end export deals and a surging stock
market.
The Hong Kong dollar was firm while forwards rebounded after
the Hong Kong banks' association left deposit rates unchanged at
its weekly review meeting.
The Hong Kong Monetary Authority (HKMA) was heard offering
longer-dated funds on Friday, though it said it had not been
interfering in money markets to add liquidity and push down
interest rates.