SE Asian currencies end higher, rupiah up
SE Asian currencies end higher, rupiah up
SINGAPORE (Dow Jones): Once again, an early move in the yen
dictated the direction of trading in Southeast Asian currencies,
the majority of which finished Asian hours stronger against the
U.S. dollar Friday.
As in recent days, most of the price action took place in the
opening hour of trading, before regional currencies slumped back
into their customary lethargy.
After opening stronger, both the Thai baht and the Singapore
dollar saw their gains eroded in later trading as the yen slipped
back and dealers squared positions ahead of the weekend.
The Indonesian rupiah, however, held on to its early advance,
supported by the news that Standard Chartered is to take over
Indonesia's Bank Bali.
The Philippine peso finished slightly higher, as did the South
Korean won and the New Taiwan dollar.
The announcement late Thursday that U.K.-based pan-Asian bank
Standard Chartered is to inject $56 million into Bank Bali,
acquiring a 20 percent stake with an option to purchase the
remainder, boosted sentiment toward the rupiah.
Traders in both Singapore and Jakarta reported unusually
strong interest in selling the U.S. dollar against the Indonesian
currency early in Asian trading, with participants in London and
New York said to be on the offer.
After dropping to its lowest level this month, however, the
U.S. currency found support from bids placed by local banks in
Jakarta, according to a trader at a European bank in the
Indonesian capital.
"There is very strong support at Rp 8,500," he said. "Local
banks still have a lot of demand for U.S. dollars, so the next
few days may see the dollar test a little higher. But Rp 8,800
should be capped by Bank Indonesia."
After falling to an April low of around Rp 8,550 in early
trading, the U.S. dollar recovered slightly, to end Asian hours
at Rp 8,570, down from Rp 8,657 the day before.
After opening at a low of S$1.7070 against the Singapore
dollar, the U.S. dollar clawed back most of its overnight losses
to end Asian hours just a touch lower on the day.
"People went short the U.S. dollar earlier in the week, so
because it's Friday, we can see some position-covering now," a
trader at a U.S. bank in Singapore said.
Late in Asia, the U.S. dollar was at S$1.7099, down a fraction
from S$1.7108 toward the end of interbank trading Thursday.
If bullish foreign investors continue to pump funds into the
local stock market over the coming week, the U.S. dollar's
potential to make gains against the Singapore currency will be
limited, according to the head of spot foreign-exchange trading
at a second U.S. bank in the city.
"At S$1.7150 the (U.S.) dollar would look pretty toppish, I
would say that's a good level to sell," he said, adding that he
would not be surprised to see the U.S. currency dip below
S$1.7000 again.
Against the Philippine peso, the U.S. dollar inched higher
from early lows around 38.000 pesos, to close at 38.020 pesos. At
Thursday's close, the U.S. currency was at 38.162 pesos.
Although the U.S. currency also opened down against the Thai
baht, the dollar rallied in later trading, to finish the day a
touch higher than at Thursday's Asian close.
"We saw a fair bit of dollar-buying in the spot, but the
market is not really running up," said the U.S. bank trading
chief, estimating that between $80 million and $90 million had
been bought against the Thai currency.
Towards the close of Asian trading, the U.S. dollar was quoted
at 37.5950 baht, up from 37.5850 baht the previous day. In the
medium-term, the U.S. dollar is thought unlikely to stray out of
a broad 37.10 baht to 37.80 baht range, although some players
expect a rally beyond 38.00 baht.
In North Asia, continued foreign fund inflows lifted the South
Korean won higher against both the U.S. dollar and the yen.
At the close of local trading the U.S. dollar traded at 1,192
won, down from 1,195 won Thursday.
The U.S. currency also closed down against the New Taiwan
dollar, finishing at NT$32.721, compared with NT$32.795 the day
before, as the local stock market rallied.