Southeast Asian currencies down on U.S. dollar rally
Southeast Asian currencies down on U.S. dollar rally
SINGAPORE (Dow Jones): Southeast Asian currencies finished Asian trading hours on Tuesday marginally lower against the U.S. dollar, as the U.S. currency once again nosed above Y135 to the Japanese yen.
The Singapore dollar, the Thai baht and the Philippine peso all slipped in line with the Japanese currency, while in North Asia both the won and the new Taiwan dollar fell against the U.S. dollar.
Although it too ended the day down a touch after falling back late in the day, the rupiah proved more resilient than other regional currencies. Despite firm official denials, including one last week from Indonesia's President Habibie, rumors of impending controls continue to swirl in the foreign exchange market, supporting the local currency.
Late in Asian trading, the U.S. dollar was quoted at 10,088 rupiah, up slightly from 11,000 rupiah late the previous day.
Foreign exchange players also proved reluctant to dip into the Singapore dollar market, according to traders.
"At this point in time I don't have anyone calling me on the Singapore dollar. I haven't seen or heard of any customers coming in to the market to do anything," said one trader at a U.S. bank in the republic.
With the Monetary Authority of Singapore widely believed to stand ready to support the U.S. dollar at S$1.7150, while at the same time looking to check any rapid rises to levels around S$1.7700 to S$1.7780, dealers complain there are scant rewards available for those prepared to risk their capital by taking positions.
"People are just trading the range," said Wee at Standard Chartered. "They are looking to buy the U.S. dollar on dips to S$1.7150 and bring it back up."
Late in Asian dealing on Tuesday, the U.S. dollar was quoted at S$1.7350, up from S$1.7296 at the same time the day before. "September was the month Malaysia imposed capital controls, so we will have to wait for the September data to see the effect on bilateral trade."
Upturn
And whatever short-term boost the upturn in exports may have produced, said traders, has been more than outweighed by the market's nervousness over the potential impact on Singapore of escalating political tension in neighboring Malaysia following the arrest Sunday of former Finance Minister Anwar Ibrahim.
In a press conference on Tuesday, Prime Minister Mahathir Mohamad confirmed that his one-time deputy will be charged with sodomy, an offense under Malaysian law.
Anwar's supporters maintain that the charges against the former minister are fabrications designed by political opponents to discredit him.
Other Southeast Asian currencies also closed lower on Tuesday. Although remaining tightly range-bound, the baht slipped back, with the U.S. dollar rising to end Asian hours at 40.6550, up a fraction from 40.6150 at Monday's close.
The Philippine peso dropped too, as concern about the potential impact on the Philippine banking sector of the impending closure of the heavily indebted Philippine Airlines continued to undermine the currency. At the close of dealing on the Philippine Dealing System, the U.S. dollar was quoted at 44.375, up from 44.290 at Monday's close.
In North Asia, the won subsided further as banks and corporations continued to chase U.S. dollars in the run-up to large scale foreign currency debt maturities falling over the coming weeks.
At the end of domestic trading the U.S. dollar was quoted at 1,400 won, up from 1,392.50 the previous day.
Meanwhile in Taipei, the new Taiwan dollar dropped against the U.S. dollar, in parallel with the fall of the yen. At the close of domestic trading the U.S. dollar was quoted at NT$34.572, up from NT$34.526 at Monday's close.