SE Asian currencies lose ground to resurgent greenback
SE Asian currencies lose ground to resurgent greenback
SINGAPORE (Dow Jones): Southeast Asian currencies gave up ground to a buoyant U.S. dollar during Asian trading hours on Tuesday.
Both the Thai baht and the Philippine peso eased to finish the session lower against the U.S. currency, while uneasy traders and investors sold the Singapore dollar to a new five-and-a-half- month low.
Against the rupiah, the U.S. dollar drifted sideways throughout the day as traders and investors continued to shun the Indonesian market.
Despite increasing provincial unrest and the blow to market sentiment inflicted by the Indonesian government's decision to delay planned bank closures, the rupiah held its own, with the U.S. dollar ending Asian trade at Rp 8,855, barely different from Rp 8,845 the day before.
North Asian currencies weakened too. In Seoul the South Korean won slid to a fresh three-month low in intraday trading, while the new Taiwan dollar also ended the local trading day weaker against the U.S. currency.
Most dealers attributed the fall in regional currencies to the renewed strength of the U.S. dollar following the release of positive economic data by the U.S. rather than to any new bearish factors undermining Asian economies.
The Singapore dollar was the first of the regional currencies to come under pressure. In addition to the across-the-board strength of the U.S. dollar, traders cited a spate of unsettling news from across Southeast Asia as a good reason to sell the local currency.
This news included the mounting unrest in Indonesia's provinces, the Singapore prime minister's current visit to Canberra to discuss regional security with his Australian counterpart and a deal between Thailand and Singapore intended to ensure the island republic can procure emergency supplies of rice in times of crisis. Noting these issues, one trader at a U.S. bank said: "The U.S. dollar is going higher (against the Singapore dollar). Investors don't feel secure, they prefer to hold U.S. dollars."
Steady U.S. dollar-buying interest throughout the Asian day compounded the local currency's initial falls, pushing the U.S. currency to an intraday high of S$1.7338, its highest level since Sept. 14.
Toward the end of interbank dealing the U.S. currency eased slightly from its earlier high, but at S$1.7334 the U.S. dollar was still considerably stronger than S$1.7236 at the same time the previous day.
In North Asia, the Korean won also tested long-term lows during intraday trading, with the dollar hitting a high of 1,227.80 won , its strongest level against the Korean currency.
At the close of trading, the U.S. dollar had slipped slightly from its intraday high, ending the session at 1,224.30 won. The U.S. currency was at 1,223.00 won at Friday's close. The Korean market was closed for a national holiday Monday.
The New Taiwan dollar sank in line with the regional trend Tuesday. At the close of local trading in Taipei, the U.S. dollar had risen to NT$33.072, from NT$32.991 at the previous close.
In Southeast Asia the Thai baht also came under pressure, with interest to buy U.S. dollars seen coming from participants in the offshore market, according to traders.
For much of the Asian trading day, however, the U.S. dollar was capped around 37.50 baht by sales from banks in Bangkok.
On the Philippine Dealing System the U.S. dollar pushed higher against the peso. At the close of local trading the U.S. currency was trading at 39.030 pesos, up from 39.000 pesos at Monday's close.