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.