Regional monies down against dollar
Regional monies down against dollar
SINGAPORE (Dow Jones): Southeast Asian currencies were lower
against the U.S. dollar in late Asian trading Tuesday after a
surge in the U.S. currency against the Japanese yen prompted
dollar-bidding across the region, traders said.
The U.S. dollar rebounded sharply from an overnight sell-off
to 115 yen as the Dow Jones Industrial Average fell 126 points to
close at 8,695 points. By mid-afternoon, the U.S. dollar had
surged from the six-week low, trading as high as 117.50 yen
during the session.
Traders said investors in North America and Europe were forced
to aggressively cover short U.S. dollar positions after strong
year-end Japanese corporate and institutional demand pushed the
dollar higher.
Traders and economists said the performance on Wall Street
tonight will once again dictate the direction of the dollar.
"The way the Dow is moving makes it a good indicator of
sentiment, and the pace in which it moves will affect the dollar-
yen. If there are more sharp 2 percent - 3 percent falls, then
the dollar could quickly be back at 115 yen," said Andrew Fung,
treasury economist at Standard Chartered Bank in Singapore.
Still, the general lack of interest in taking year-end
positions in illiquid regional currency markets has created a lag
to such movement in the "big dollar," as one trader said.
Instead, the U.S. dollar climbed sharply against the Thai
baht, in part because of the flagging yen, but also because of
what traders described as overly rambunctious baht-buying this
past week in the run-up to the Financial Restructuring Agency
auction.
At 09:00 GMT (4:00 a.m. EST), the U.S. dollar was trading at
36.0750 baht, well up from 35.7350 in late Asian trading Monday.
"People are using this opportunity to readjust positions, and
buy some dollars after a week of buying baht before the auction,"
said a trader at a Thai bank in Singapore, adding that the
momentum created could take the U.S. currency as high as 36.20.
Bidding for about $11 billion worth of assets of 56 defunct
Thai finance companies ended Tuesday. The results - to be
announced Wednesday - "have the potential to make or break an
economic recovery," said Desmond Supple, a regional economist at
Barclays Capital in Singapore.
Against the Singapore dollar, the U.S. dollar was trading at
S$1.6518, up from S$1.6470 in late trading Monday.
The Singapore dollar is moving in line, albeit sluggishly,
with the weakening yen, traders said.
"There isn't much in the market. The U.S. dollar will likely
finish the year trading in this range, S$1.6450 on the low side,
S$1.66 on the high," said a trader at a Japanese bank in
Singapore.
Traders still complained about a lack of real domestic news on
which to trade.
The U.S. dollar moved higher even against the dormant rupiah,
trading at 7,605, up from 7,525 late Monday. "There is U.S.
dollar-bidding in every market today - not a lot, but enough to
push it higher," said a trader at a Thai bank.
The U.S. dollar was also trading at 39.00 pesos, up from
38.950 late Monday.
In North Asia, the U.S. dollar was trading at 1,210.7 won and
NT$32.251, up from 1,203.5 won but down from NT$32.258,
respectively.