Rupiah up late on dollar profit-taking, stop-losses
Rupiah up late on dollar profit-taking, stop-losses
JAKARTA (Dow Jones): The Indonesian rupiah rose 2 percent late Wednesday, as it extended Tuesday's technical rebound amid easing political tensions in Jakarta, dealers said.
Around 0920 GMT, the dollar was at Rp 9,130, down from around Rp 9,330 late Tuesday, but up from Wednesday's intraday low of Rp 9,115.
Early in the day, dollar-selling by a large U.S. investment bank around Rp 9,310 to Rp 9,320 prompted interbank participants to unload their dollar positions, sending the dollar below the 9,300 support level, dealers said.
Stop-loss sell orders were triggered as the dollar's support levels against the rupiah caved in one after another, dealers said.
Senior Economics Minister Rizal Ramli's comments that Bank Indonesia hadn't intervened to support the rupiah Wednesday quashed speculation state banks were selling dollars on behalf of the central bank.
Rizal said the rupiah had strengthened Wednesday after Vice President Megawati Sukarnoputri urged her party Tuesday to stand behind Wahid.
Dealers said they expected the dollar's next psychological support of Rp 9,100 to hold as sentiment on the rupiah remains bearish, with the domestic political situation still susceptible to another flare up.
"I certainly think it's a buy on dips," said a dealer at a European bank.
The weighted average interest rate on one-month Sertifikat Bank Indonesia notes rose quite sharply at Wednesday's weekly auction, amid concerns over inflation, but this will unlikely provide any additional boost to the rupiah as political uncertainties loom, dealers said.
The one-month SBI notes stood at 13.81 percent at the weekly auction Wednesday, up from 13.74 percent at last week's auction, Bank Indonesia said.
Meanwhile, Most Asian currencies closed stronger in Asia Wednesday, after an overnight rebound in the Nasdaq dispelled some of the gloom plaguing the region while signs emerged that South Korea might be making progress in restructuring its economy.
The New Taiwan dollar, however, ended lower Wednesday amid outflows of foreign equity funds from the local market, traders noted.
A holiday in the Philippines - where political turmoil has hurt sentiment in the region as a whole in recent weeks - also contributed to the respite in markets Wednesday.
The South Korean won was swept higher as stock prices in Seoul soared in response to the Nasdaq's 5.6 percent overnight jump and signs that the government might be getting out of the business of propping up teetering companies - which could be a positive development for the economy in the long run.
The Singapore dollar and the Thai baht were lifted in part by buoyant rupiah and won. However, a new rule in Thailand that kicked in Wednesday requiring traders to report the purpose of each foreign exchange transaction stifled trading in the baht, dealers said.
Late Wednesday, the U.S. dollar at S$1.7498, easing from S$1.7563 late Tuesday. The U.S. currency was quoted at 43.630 baht, down from 43.885 baht Tuesday.
Late Wednesday, the U.S. dollar was at 1136.0 won, down from 1139.70 won late Tuesday.
The Taiwan dollar bucked the general trend Wednesday, falling against its U.S. counterpart. Intervention by the central bank supported the Taiwan dollar during thin early trading, but the currency eventually succumbed to weakness in local stock prices.
Taiwan's main stock index Wednesday closed down 119.16 points at 5425.02.