SE Asian currencies mixed in run-up to Xmas holidays
SE Asian currencies mixed in run-up to Xmas holidays
SINGAPORE (Dow Jones): Asian currencies were mixed against the U.S. dollar in thin trading late Wednesday.
The Philippine peso and New Taiwan dollar did manage to move slightly higher, benefiting from a rise in the yen against the U.S. dollar early in the Asian trading session.
U.S. dollar buying interest eventually drove the Korean won, Singapore dollar, and Thai baht lower, traders said, while Indonesia's rupiah was generally flat.
"Asian currencies were trapped in extremely dull trading as market participants lost all appetite to trade in market conditions," said Thio Chin Loo, Asian foreign exchange strategist at Banque Paribas in Singapore.
"However, further signs of official discomfort over the strength of Asian currencies have emerged, with central bank activity cited in the Singapore dollar and Korean won,"
The Bank of Thailand also said on Tuesday that Thailand's export recovery could be hampered by the stronger than expected baht.
The Korean government has urged the Bank of Korea to intervene to prevent any significant strengthening of the won.
"Significant strengthening of the Asian currencies from current levels remains unlikely, and with the mixed dollar-yen trend until year-end, Asian currencies could very well end the year very much unchanged from current levels."
Traders - sitting in half-full trading rooms, watching interbank markets bereft of activity - agree with the economist's year-end forecast, as well.
At 09:00 GMT (4:00 a.m. EST), the U.S. dollar was trading at 1,211.4 won, up from 1,201.5 in late trading Tuesday.
Traders said a cautious market reacted predictably to Tuesday's comments by a Ministry of Finance and Economy official who said the government may buy U.S. dollars to cap the won's recent gains in order to retain export competitiveness.
The U.S. dollar was also trading at S$1.6551, up from S$1.6538 late Tuesday, as reports and market rumors continue to surface about the Monetary Authority of Singapore's apparent keenness to let the republic's currency slide.
Singapore's foreign currency reserves have been climbing an average of 9.2 percent between June and October, according to government figures released yesterday. That's proof, analysts said, that the MAS is taking an active role in curtailing the Singapore dollar's strength.
The U.S. dollar was trading at 36.37 baht, up from 36.3450 late Tuesday.
Traders said the market, while extremely thin, saw some interest to buy U.S. dollars late in the day as reports circulated that it could take as long as six months to debate government-backed financial bills, slowing Thailand's economic progress.
The U.S. dollar was trading at 7,789 rupiah, barely unchanged from 7,785 late Tuesday, although the U.S. currency looked as though it might move above 7,900 during the session.
Traders said some U.S. dollar buying interest by offshore banks has been dragging the rupiah lower, but U.S. dollar selling interest by Indonesian state banks has also apparent, keeping the currency range bound.
"The central bank appears content with the U.S. dollar moving between 7,500 and 8,000," said a trader at a Japanese bank in Singapore.
On the Philippine Dealing System, the U.S. dollar was trading at 39.015 pesos, down from 39.105 late Tuesday.
"The peso should continue to be underpinned early next year though it may be unsettled by current yen weakness in the interim," said an economist at Standard Chartered Bank in Singapore.
In North Asia, the U.S. dollar was also trading at NT$32.247, down from NT$32.253 late Tuesday.