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.