Most Asian currencies gain ground on foreign buying
Most Asian currencies gain ground on foreign buying
HONG KONG (Dow Jones): The South Korean won rose sharply Thursday after a sovereign credit rating upgrade released a wave of won buying that swept aside government efforts to hold the currency down.
Southeast Asian markets also saw a surge of activity, as foreign exchange traders piggybacked customer buying interest to bid both the Thai baht and the Indonesian rupiah around 1.5 percent higher against the dollar.
Once again, South Korea's Finance and Economy Ministry attempted to dictate the tone of the day's trading in the won, declaring just minutes before the start of dealing in Seoul that it remained prepared to act to slow the won's appreciation.
The ministry's efforts were frustrated, however, when U.S. ratings agency Moody's Investors Service Inc. announced it was upgrading South Korea's sovereign credit ratings.
The news prompted foreign investors to step up their won- buying, while South Korean exporters hastened to convert foreign currency revenues before the won could strengthen further.
Despite dollar-buying by South Korean state banks, the U.S. currency soon tripped through stop-loss orders around 1,133.00 won, falling to end the session at 1,131.30 won, down from 1,135 won at Wednesday's close.
Elsewhere in North Asia, the New Taiwan dollar ended slightly lower as investors booked profits ahead of the year's end. At the Taipei close, the U.S. currency was quoted at NT$31.647 compared with NT$31.640 the previous day.
But in Southeast Asia, regional currencies ended local hours sharply higher as traders leapt onto a developing strengthening trend in a thin market.
Sentiment swung behind the baht when traders spotted the same European bank that had bought rupiah Wednesday buying up the Thai currency.
Eager to cash in on any moves, dealers bought up the baht, sending the currency sharply higher as the market's end-of-year illiquidity amplified the extent of the rise.
By the end of Asian trading, the dollar had been pushed down through successive stop-loss levels to trade at 37.9150 baht, well below 38.4650 baht late Wednesday.
A similar pattern was repeated in the rupiah market, where the dollar was sold down to Rp 7,070, down steeply from Rp 7,175 late Wednesday.
Dealers doubted whether the trend would extend into Friday's session, however, saying that traders would be anxious to book their profits from the move as soon as possible.
"No-one wants to sit on an open position," said the head of regional currencies trading at one U.S. bank in Singapore, explaining that traders are unwilling to run risks given the illiquidity of the regional markets and the approach of the New Year.
The Singapore dollar also rose in line with the regional trend, although dealers hesitated to sell the U.S. currency below resistance at S$1.6750, fearing intervention by the local monetary authority. Late in Asia, the U.S. dollar was quoted at S$1.6752, compared with S$1.6790 late the previous day.
Against the Philippine peso, the dollar ended at 40.615 pesos, down from 40.635 pesos at Wednesday's close.