Regional currencies gaining ground on U.S. dollar sales
Regional currencies gaining ground on U.S. dollar sales
HONG KONG (Dow Jones): Purchases of regional currencies by market participants looking to cut back their long U.S. dollar positions ahead of the weekend boosted Asian currencies during local dealing hours Friday.
Across the continent regional currencies edged higher in parallel with the Japanese yen, after the U.S. dollar failed to sustain its advance beyond Y124.00 in Asia trade.
"We have seen some squaring of long dollar positions ahead of the weekend," said the regional currencies trader at one European bank in Singapore.
"With the dollar back below Y124, people are afraid of a retracement so they are throwing out some of their long positions against the rupiah, baht and the Singapore dollar," the trader continued.
Despite the dollar sales against the regional currencies Friday, most traders still believe the U.S. currency will head higher again when trading resumes Monday.
"The important thing is to see where the dollar closes against the yen at the end of this week," the trader said. "If it closes above Y123.50, then we should see the dollar try the upside again against the regionals."
I expect to see the dollar higher too, but it's not going to run up very fast," added a trader at a U.S. bank in Singapore.
Sizable sales of the dollar against the Thai currency by U.S. banks in the offshore market helped force the dollar lower against the baht Friday.
Late in Asian trading Friday, the dollar was quoted at baht 37.0000 baht, down from 37.1400 baht late Thursday.
The U.S. dollar will also face stiff resistance advancing against the Singapore currency, said traders. Despite buying from local banks Friday, corporate sales of the U.S. currency capped the market at S$1.7240 throughout the session.
Late in the Asian day, the U.S. dollar had slipped to S$1.7192, down from S$1.7232 late on Thursday.
While short-term support for the U.S. dollar is seen at S$1.7180, traders described heavy resistance all the way up from S$1.7250 to S$1.7350.
The dollar also slipped back against the Indonesian rupiah and the Philippine peso.
Towards the end of local trading Friday, the U.S. currency was quoted at Rp 8,037, down from Rp 8,140 late Thursday.
On the Philippine Dealing System, the U.S. currency ended at Rp 37.865, down from Rp 37.890 at the previous close.
North Asian currencies performed strongly Friday, with both the new Taiwan dollar and the Korean won rising against the U.S. dollar.
Speculation that Taiwan's first quarter economic growth would exceed expectations were given a boost by news that export orders grew by 5.5 percent in April, while industrial production rose by 6.4 percent on the year.
Both set of figures helped lift the Taiwanese currency in local trading, pushing the U.S. dollar down to finish the session at NT$32.790, from NT$32.825 at Thursday's close.
Official data announced after the close of the local market showed that GDP rose by 4.33 percent during the first quarter, higher than the forecast 3.7 percent growth rate. The official forecast for the full year was raised to 5.07 percent, up from the previous estimate of 4.74 percent.
Dollar sales in exchange for the won, attributed by traders to Korean exporters repatriating foreign revenues, forced the U.S. currency as low as 1,187.80 won in afternoon trading.
Dollar purchases by the state-owned Export-Import Bank of Korea later lifted the U.S. currency off its lows to finish at 1,194.50 won. At that level, however, the dollar was still below Thursday's closing level of 1,196.90 won.