SE Asian currencies mixed; baht falls, rupiah rises
SE Asian currencies mixed; baht falls, rupiah rises
SINGAPORE (Dow Jones): Southeast Asian currencies turned in a mixed performance on Friday. The Thai baht fell, while the Indonesian rupiah and the Philippine peso inched upward. The Singapore dollar traded sideways.
In North Asian trading, the South Korean won and the New Taiwan dollar both ended higher, lifted by the early rise in the yen.
With the swings in the yen's exchange rate set to remain the dominant influence on regional foreign exchange markets, most dealers cautiously predict that Southeast Asian currencies will stay within broad trading ranges over the coming week.
"All the regionals are very yen-related," said the head of regional currency trading at one U.S. bank in Singapore.
"None of these moves are very significant. Everybody just follows the dollar/yen exchange rate until the market is caught either long or short, and then they just go for the stops," he added, referring to stop loss orders, which are pre-placed to close out positions should the exchange rate move adversely.
Only in Thailand, where the market awaits the results of Friday's Financial Sector Restructuring Authority auction of a notional US$6 billion-worth of defunct finance company assets, are traders eying developments in the local market.
"The results of the FRA auction won't be great, but there won't be a big impact on the market," said a trader at a second U.S. bank in Singapore, reflecting the generally held view in the market.
Following a call earlier in the week from Supachai Panitchpakdi, Thailand's deputy prime minister and commerce minister, for the baht to weaken in order to assist struggling Thai exporters, traders are generally looking to buy the dollar on any dips.
With good bidding interest set to support the U.S. currency around 37.20 baht, most players see the dollar pushing towards the top of its current range around 37.70 baht, although many feel it will remain capped at that level.
Late in Asia on Friday, the U.S. dollar was quoted at 37.49500 baht, up from 37.4650 baht towards Thursday's close.
In contrast, the rupiah strengthened markedly on Friday after selling pushed the U.S. dollar down through the Rp 9,000 barrier, triggering around $20 million worth of stop loss sales, according to one trader's estimate.
The U.S. currency stabilized in later trading, ending Asian hours at Rp 8,900, down from Rp 9,025 late the previous day. Against the Singapore dollar, the U.S. dollar ended almost flat on the day.
According to a trader at a local bank the U.S. dollar encountered strong buying interest on being sold down to S$1.7220. With that level seen providing a short term floor for the U.S. currency, over the coming week he expects the U.S. dollar to test upside resistance around S$1.7300.
Late in Asia, the U.S. dollar was at S$1.7232, little different from S$1.7239 at the same time the day before.
On the Philippine Dealing System, the peso ended higher, lifted by the rise in the yen. At the close the U.S. dollar was quoted at 38.750 pesos, compared with 38.865 pesos on Thursday.
Most market participants expect the peso to remain steady through the coming week, unaffected by the central bank's slight reduction of short term interest rates late Friday after the local market had closed.
In North Asia the won ended higher, with the U.S. dollar slipping to close at 1,220.80 won, down from 1,224.40 won the day before.
Against the Taiwanese currency, the U.S. dollar ended at NT$33.096, compared with NT$33.107 the previous day.