Most Asian monies mixed late, rupiah mostly flat
Most Asian monies mixed late, rupiah mostly flat
S. Anuradha, Dow Jones, Singapore
Asian currencies were mixed late Friday, with comments by several central bankers in the region indicating different levels of comfort with the dollar's recent weakness.
The Korean won fell against the dollar as the market struggled to interpret remarks by the Bank of Korea, while the Thai baht finished firmer thanks to equities-related inflows and the central bank's reassurance it was comfortable with the baht's strength.
The rupiah, Singapore dollar, Taiwanese dollar and peso were mostly flat late, although the central bank governor in the Philippines said he thought the peso should trade higher.
Friday's trade continued to be muted with many participants distracted by key World Cup matches, and volume in many markets was thin.
Early in the session, Bank of Korea Governor Park Seung said that the recent weakening in the dollar against the won has reduced the need for an interest rate hike in Korea, a comment some took to indicate the central bank would tolerate a stronger won. But Park also said the central bank will have to buy dollars in the market if the U.S. currency's drop versus the won is "excessive" - suggesting the bank won't let the won strengthen much more.
The market eventually chose to focus on the latter interpretation after a spate of afternoon dollar-buying by state- run banks spurred a round of dollar short-covering, pushing up the dollar to 1,236.1 won, above Wednesday's finish at 1,233.6. South Korean markets were closed Thursday for a holiday.
In Singapore, the dollar dipped against the local currency after Moody's Investors Service announced a surprise upgrade of the nation's ratings. The dollar hit an intraday low of S$1.7835 after Moody's raised Singapore's foreign currency country ceilings for bonds and deposits, as well as the government's foreign currency rating, to Aaa, its highest grade, from Aa1.
The dollar closed at S$1.7865, unchanged from levels a day earlier.
In Thailand, the dollar finished at 42.175 baht, down from 42.265 baht Thursday. Capital inflows for foreigners' portfolio investments continued to weigh on the U.S. currency, a Bangkok dealer said.
Elsewhere, the Philippine peso closed flat amid a dearth of fresh incentives. The dollar closed at its intraday high of 50.470 pesos, little changed from 50.465 pesos Thursday, as a recent rally by the U.S. currency appeared to be running out of steam.
The peso's downside was supported by comments from the country's central bank chief, who said the dollar should fall below 50.00 pesos given the strong foreign-exchange inflows and expectations of a sizable balance-of-payments surplus this year.
The New Taiwan dollar ended stronger against its U.S. counterpart on U.S. dollar selling by exporters - although the rise was capped by central bank intervention, dealers said.
At 0800 GMT (3 p.m. Jakarta time), the U.S. dollar closed at NT$34.112, down from NT$34.121 Thursday.
One dealer said the central bank's U.S. dollar bids totaled around US$150 million.
The Indonesian rupiah ended steady in range-bound trading, but is expected to head higher next week following gains in local stock prices in the last four sessions, dealers said.
The dollar closed at Rp 8,740, little changed from its close at Rp 8,745 Thursday.
Dealers said that dollar demand from local companies to pay maturing offshore debts offset dollar offers from foreign banks, leaving the dollar range-bound.
Local companies are saddled by around $60 billion of foreign debts, which they borrowed before the 1997-1998 Asian financial crisis. Most Indonesian companies only managed to get a three- year rollover on the payment of the debts, which means some of them started making repayments last year. Offshore debt payments occasionally weigh on the rupiah.