Most Asian currencies up, dollar rally wears thin
Most Asian currencies up, dollar rally wears thin
Alan Yonan Jr., Dow Jones, Singapore
The Philippine peso, South Korean won and Thai baht strengthened against the U.S. dollar Wednesday, while other Asian currencies were little changed.
A stabilization of the yen after two straight days of declines helped provide a base for other Asian currencies to build on.
The won drew additional support from expectations that a large supply of dollars will flood into the market when a Scandinavian consortium completes its US$1.3 billion purchase of Hyundai Merchant Marine's car shipping unit, traders said.
The dollar finished at 1,216.4 won, down from Tuesday's close of 1,217.8 won.
Several economic reports issued Wednesday sent mixed signals regarding South Korea's recovery.
Business leaders continue to be concerned about uncertainties associated with the upcoming presidential election, as well as external and domestic economic conditions, according to a survey conducted by the Federation of Korean Industries.
An index of business sentiment compiled by the Federation fell to 95.6 percent in December from 98.6 percent in November.
A separate report revealed that the troublesome rise in South Korea's household debt slowed in the third quarter.
Household debt grew by 6.7 percent for the period, compared with 8 percent in the second quarter. The government has taken steps to curb the growth of consumer debt levels, fearful that it could trigger a crisis in the banking sector.
The Philippine government's sale of five billion peso worth of dollar-linked notes to a group of 11 banks underpinned the local currency.
The dollar closed at 53.570 pesos on the Philippine Dealing System, down from 53.700 pesos Tuesday.
Because the securities count toward the dollar positions held by the banks, and because those dollar positions are limited by regulation, purchasing the securities effectively limits future dollar demand from the banks.
"Holding on to the dollar-linked notes is like being long on dollars," a trader with a foreign bank said.
The market showed little reaction to a Philippine government report that exports rose a weaker-than-expected 2.6 percent in October from a year earlier. Compared with September, exports fell 5.3 percent.
However, further declines in exports could weaken the peso, which is already under pressure from fiscal and security concerns, said Robert Subbaraman, regional economist with Lehman Brothers in Tokyo.
The Indonesian rupiah ended little changed in quiet trade as activity wound down ahead of the Muslim Idul Fitri holidays that start Thursday.
Indonesia's foreign exchange and stock markets will be closed from Thursday and will reopen Dec. 11.
"Nothing much was going on here," said a trader at a Japanese bank, adding that almost 90 percent of the investors were already on holiday.
The dollar was trading late Wednesday at Rp 8,987, little changed from Rp 8,985 late Tuesday.
Local companies were also generally absent from the market Wednesday. Traders noted most corporates have already settled their foreign debt and import bills for 2002, which is slowing down dollar demand.