SE Asian currencies shuffle sideways amid few indicators
SE Asian currencies shuffle sideways amid few indicators
SINGAPORE (Dow Jones): Southeast Asian currencies continued their sideways shuffle during Asian trading on Thursday.
With few developments to give traders any incentive either to buy or to sell, both the Thai baht and the Indonesian rupiah ended flat on the day. The more liquid Singapore dollar faithfully shadowed the yen higher, while the Philippine peso slipped back, giving up a little more of Tuesday's gains.
In North Asia the South Korean won remained range-bound as officials warned against excessive local currency strength in the face of a barrage of positive economic news. The new Taiwan dollar inched higher in response to favorable trade data.
Although there was some interest from offshore players to buy U.S. dollars against the Thai baht, this was easily countered by selling interest from Thai exporters, which served to cap the U.S. currency at 37.80 baht.
Despite the resistance the U.S. dollar is facing, and the news late Wednesday that the International Monetary Fund (IMF) had released a further US$500 million to Thailand, commending the government's exchange rate and interest rate policies, offshore market sentiment still favors a stronger U.S. currency and a weaker baht.
In the near term, however, offshore players are unlikely to sell the Thai currency short aggressively, fearful of a liquidity squeeze in the offshore market during next week's three-day Sonkran Festival holiday in Thailand.
Late Thursday in Asia, the U.S. dollar was trading at 37.7650 baht, little different from 37.7550 the day before.
The Indonesian rupiah was also flat despite a sharp fall in SBI rates at Wednesday's auction to 36.40% from 37.42%. Fears that Bank Indonesia would sell U.S. dollars through the state banks to curb any rise in the U.S. currency above Rp 8,800 deterred offshore players from actively bidding.
Late in Asian hours, the U.S. dollar was at Rp 8,760, barely changed from Rp 8,765 the previous day.
Against the Singapore dollar, the U.S. currency weakened slightly, giving up a little ground under pressure from corporate offers and from its fall against the Japanese yen in Tokyo trading.
For the time being, however, the U.S. currency remains relatively heavy. It ended Asian trade on Thursday at S$1.7327, down slightly from S$1.7365 late Wednesday, although still well within recent trading ranges.
On the Philippine Dealing System, the U.S. dollar ended lower against the peso for the second day in a row after rallying in previous sessions.
Dealers said that the central bank's one percentage point cut to banks' reserve requirements late Wednesday had little impact on trading.
At the close of Thursday's session, the U.S. dollar was at 38.500 pesos, up from 38.400 pesos the day before.
In North Asia the dollar ended higher against the South Korean won on buying by the Export-Import Bank, which supported the U.S. currency, despite a barrage of dollar-negative news.
The bullish mood failed to lift the won, however, as verbal interventions from officials and active U.S. dollar-buying by the Export-Import bank, universally believed to be at the authorities' request, supported the U.S. currency.
At the end of local trading, the U.S. dollar finished at 1,223.10 won, higher than 1,222.80 won on Wednesday, but well within the 1,219 to 1,225 range it has kept for the last two weeks.
Against the new Taiwan dollar, the U.S. currency slipped back slightly, as the announcement of $2.67 billion trade surplus for the first quarter -- a much larger figure than the market had expected -- helped to buoy the local currency.
At the close, the U.S. dollar was quoted at NT$33.118, down from NT$33.130 the previous day.