Rupiah leads Asian monies upward
Rupiah leads Asian monies upward
Alan Yonan Jr, Dow Jones, Singapore
Several Asian currencies posted near-term highs Monday as
prospects for economic recovery in the region continued to damp
the dollar's popularity.
The New Taiwan dollar and Indonesian rupiah recorded their
best performances so far this year. The South Korean won,
Singapore dollar and Thai baht also strengthened, but the
Philippine peso tumbled following a bomb explosion that killed 14
people Sunday in the southern part of the country.
The Taiwan central bank tried to keep a lid on the New Taiwan
dollar's rise by intervening in the foreign exchange market, but
the local currency still managed to power its way to a four-month
closing high against its U.S. counterpart.
Foreign inflows to the local stock market, which surged to
NT$35 billion last week, have been helping fuel demand for the
New Taiwan dollar.
Although the normally interventionist central bank has eased
its activity in the market in recent days, it jumped in and
bought U.S. dollars when the currency fell through several key
support levels on its way to an intraday low of NT$34.757.
The central bank bought an estimated US$600 million to $700
million, dealers said.
The intervention helped the U.S. dollar recover some of its
losses to close at NT$34.845, down from $34.898 Friday. It was
the New Taiwan dollar's best finish since Dec. 20 when it closed
at NT$34.756.
For most of this year the central bank has managed the New
Taiwan dollar in a fairly tight trading range in an effort to
keep the country's exports competitive with the likes of Korea
and Singapore, said James Malcolm, foreign exchange strategist at
JP Morgan. The pair has traded roughly between NT$35.10 and
NT$34.90.
But with signs of economic recovery beginning to lift other
currencies in the region, Taiwan's central bank is apparently
more willing to let the local currency strengthen against the
dollar, he said.
"Going forward we expect authorities to become more
comfortable with letting the currency go higher," he said.
The rupiah powered to its best finish since last September,
continuing a rally that began last month with the government's
successful sale of its 51 percent stake in PT Bank Central Asia.
The dollar closed at Rp 9,255, down from Rp 9,340 Friday.
With political stability and economic reforms helping reduce
the risk sometimes associated with Indonesia, investors are
becoming more attracted by the high yields Indonesian assets have
to offer, JP Morgan's Malcolm said.
He said he expects the rupiah, which has already appreciated
by 10 percent to 12 percent so far this year, to strengthen to
about Rp 8,500 per dollar by the end of the year.
The won ended at a three-month high, but came off its intraday
peak on late afternoon dollar demand.
The dollar finished at 1,308.8 won, down from Friday's close
of 1,312.3 won. It was the dollar's weakest finish since closing
at 1,302.0 won Jan. 7.
The Singapore dollar rose to a six-week high, benefiting from
the U.S. dollar selling going on elsewhere in the region.
Near the end of Asian trading the U.S. dollar was quoted at
S$1.8177, down from S$1.8221 late Friday.
Heavy selling briefly pushed the U.S. dollar to a six-week low
of S$1.8160 in mid-afternoon trading, but it bounced off the low
amid fears the local monetary authority might intervene do
prevent the Singapore dollar from strengthening too rapidly,
dealers said.
The peso was unable to overcome negative sentiment associated
with a series of bomb explosions in the south.
The dollar closed at 50.970 pesos on the Philippine Dealing
System, up from 50.890 pesos Friday.
A series of bombings Sunday in General Santos, one of the
largest cities in the southern Philippines, killed at least 14
people and injured around 45 others.
Another explosion occurred in General Santos early Monday,
prompting President Gloria Macapagal Arroyo to order a state of
emergency in the city.
The Thai baht tracked other Asian currencies higher.
Late in Asia the dollar was quoted at 43.260 baht, down from
43.310 bath late Friday.