Shoutheast Asian currencies still weak
Shoutheast Asian currencies still weak
SINGAPORE (Reuter): Southeast Asian currencies had a volatile session yesterday as the market tried to find its footing while investors continued to look askance at the region.
Dealers said currency markets lacked clear direction, with participants keeping an eye on the increasingly fragile regional bourses.
"It will take a long time for the market to find equilibrium in these currencies. We'll probably see very choppy trading ranges especially with the stock markets in turmoil as well," a U.S. bank dealer in Singapore said.
In Thailand, the baht succumbed to persistent corporate demand for dollars and fell through the long-anticipated 35 to the dollar level in late trade.
Dealers said domestic political jitters and uncertainty in regional currency and stock markets drove corporate players to hedge their positions. The Thai parliament is to start debating a controversial new draft constitution on Thursday.
"We have seen continuing corporate demand for dollars. Now it has broken 35, I think there is a little panic as it is a psychological level," a local bank dealer in Bangkok said.
The baht was at 35.100/300 to the dollar onshore at 1020 GMT against 34.70/90 six hours earlier. It was at 34.45/65 offshore.
"There have been signs since early this morning that this might happen as there were a lot of bids (for dollars) from the local foreign banks," the dealer said.
The Indonesian rupiah eased in slow trade but dealers said the central bank's new five million dollar limit on foreign exchange forward selling to offshore parties was having little sustained impact in the spot market.
They said it was limiting sharp rises in the swap market.
Spot rupiah was at 3,020/30 compared with an early high of 2,990 and its opening at 3,010/20.
A dealer in Singapore said there was talk of Jakarta operators buying dollar call options in Singapore, suggesting an underlying preference to be long dollars in the current climate of uncertainty.
The Malaysian ringgit rose off its lows but dealers said the dollar remained eagerly sought around 2.92 ringgits.
"Sentiment is still bearish on the Malaysian economy as a whole," the U.S. bank dealer said.
Worries about a Malaysian trade deficit for July were also expected to block the ringgit's gains. The market has been speculating about a July trade deficit of between 600 million and 1.0 billion ringgit, but there were rumors it could be wider.
Malaysia reported a trade deficit of 2.8 billion ringgit in June, after a surplus of 156.2 million ringgit in May.
The Singapore dollar hovered around the 1.52 level to the U.S. dollar in late trade after earlier falls were blocked near 1.5240, dealers said.
Concerns about possible U.S. dollar sales by the Brunei Investment Agency (BIA) hampered aggressive dollar buying near the 1.53 level, they said.
The Philippine peso ended a touch above its record low of 30.90 to the dollar as foreign funds bailed out of edgy stock and money markets in Manila.
A lack of intervention by the central bank, which adjusted its offer price for dollars every time market rates inched closer, exacerbated the peso's decline.
The Taiwan dollar ended virtually unchanged at T$28.615 against Monday's T$28.618 close. The central bank's continued resolve in defending the currency kept it in a narrow range despite strong U.S. dollar demand from foreign funds fleeing the sliding stock market, dealers said.
The South Korean won ended lower despite repeated central bank interventions and dealers said the currency could slip further as the central bank's efforts were seen as aimed at slowing the won's slide, not ending it.