Most Asian currencies tumble
Most Asian currencies tumble
SINGAPORE (Dow Jones): The gloom surrounding the Japanese yen sent most Asian currencies reeling late Thursday, with the Thai baht and the Singapore dollar slumping to their lowest levels since the first quarter of 1998.
The South Korean won fell to it's weakest level since early November 1998. The Philippine peso and the New Taiwan dollar were also dragged lower.
Indifferent to the region's woes, the Indonesian currency was firmer thanks to aggressive intervention by both the local central bank and the Indonesian Bank Restructuring Agency.
Dealers believed the central bank and IBRA sold a total of $60 million Thursday amid reduced dollar demand from local companies.
The dollar fell to an intraday low of Rp 10,275 due to the dollar selling, but it rebounded quickly as the slide increased local companies' appetite for the dollar.
The dollar ended at Rp 10,390, down from Rp 10,425 Wednesday.
"The dollar was well supported below Rp 10,300," said a dealer with a foreign bank. "I think the dollar will climb back to above Rp 10,400 if Bank Indonesia doesn't keep pumping dollars into the market."
The Singapore dollar extended its relentless fall in late trading, briefly breaking below S$1.7900 support against its U.S. counterpart to brush S$1.7905, its weakest level since January 1998, at the height of the Asian financial crisis.
But fears of intervention by the Monetary Authority of Singapore, the city-state's de facto central bank, led participants to unwind their U.S. dollar positions, dealers said.
"Everybody was selling (U.S. dollars)," said a dealer at an Asian bank. "These are the target levels that people are looking to sell. I don't see the central bank coming in."
At 0855 GMT, the U.S. dollar was at S$1.7878, up from S$1.7802 late Wednesday.
Widespread projections that the yen could extend its decline toward Y125 and the euro's langour below $0.90 have provided enough incentive for the market to go short in the Singapore dollar, dealers said.
Late Thursday, the dollar extended its inexorable rise against the major currencies. The euro fell to a fresh 2001 low of $0.8867, while the Australian dollar slipped to a new all-time low at $0.4898. Against the yen, the dollar was at Y124.07, above Y123.43 late Wednesday in New York.
The Thai currency briefly fell to its weakest level since March 1998, when it touched an intraday low of 44.47 baht against the dollar earlier in the day.
Late in the day, the dollar was at 44.445 baht, higher than 44.165 baht late Wednesday.
Expectations of a further fall in the baht prompted some foreign banks, in particular a U.S. one, to push up dollar/baht forwards. But this only makes it costly to go long in dollars in the spot market, prompting some dealers to say a downward correction in the U.S. currency would be imminent.
"It's a deterrent to be buying dollar-baht outright," said a dealer at a U.S. bank.
The flagging baht cast a shadow on the Philippine peso, which closed at 48.955 pesos against the dollar, weaker than its previous close of 48.633 pesos.
The yen's impact on North Asian currencies was also unyielding.
The South Korean won closed at 1,318.6 won against the dollar, its weakest level since Nov. 3, 1998.
The New Taiwan dollar closed at an 11-week low of NT$32.864 against its U.S. counterpart, compared with NT$32.771 Wednesday.