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.