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.