Southeast Asian currencies mixed ahead of long weekend
Southeast Asian currencies mixed ahead of long weekend
SINGAPORE (Dow Jones): Southeast Asian currencies turned in a mixed performance against the U.S. dollar during Asian trading hours on Friday as local markets wound down ahead of a long weekend over much of the region.
The Singapore dollar and the Philippine peso both fell, while the Thai baht edged upward. The Indonesian rupiah ended flat.
In North Asia, the South Korean won inched higher, as fresh indicators confirmed the market's growing impression that Korea has turned the corner and is set on the road to macroeconomic recovery.
For the first time since the third quarter of 1996, the Bank of Korea's quarterly index of business confidence ticked above the 100 mark, "raising hopes that economic recovery will be more clear during the second quarter," according to the central bank's survey.
In addition, South Korea's Labor Minister said that the country's jobless rate is expected to fall to 8.5 percent or 8.6 percent in March and April, down from a 17-year high of 8.7 percent in February.
"We think the Korean economy could produce some surprises on the upside before the end of this year," said Lian Chia Liang, a North Asian analyst at Merrill Lynch.
Positive signals include an increase of shipments relative to inventories, stabilization in private consumption and "a dramatic turnaround in foreign capital flows."
"If you look across the crisis countries, Korea is the leader in making a clear-cut unambiguous macroeconomic turnaround," Lian declared.
The chances that the won will strengthen appreciably from current levels are relatively low, however.
Anxious to preserve export competitiveness relative to Japan and other Asian countries, the Bank of Korea is likely to forestall further won strength by buying U.S. dollars in the foreign exchange market.
At Friday's close the U.S. dollar stood at 1,222.60 won, down fractionally from 1,223.00 won the day before. Short-term onshore interest rates were around 7 percent.
Elsewhere in Northeast Asia, the new Taiwan dollar dropped back slightly, trailing the yen's move in Asia. At the local close, the U.S. dollar ended at NT$$33.124, compared with NT$33.111 the previous day.
In Southeast Asia, the baht strengthened after news that the World Bank and Japan's Miyazawa Fund had respectively approved $600 million and $736 million of additional loans to Thailand, spurring market players to cover short positions in the local currency.
Despite the baht-supportive news, the U.S. currency remains firmly within its recent trading ranges, holding well above 37.40 baht.
Toward the end of Asian trading, the U.S. dollar was quoted at 37.5800 baht, down slightly from 37.5950 baht late on Thursday.
In contrast to the baht, the Singapore dollar ended Friday's session lower against the U.S. currency, as the Singapore currency shadowed the weakness of the yen during Asian hours.
Although the U.S. dollar succeeded in pushing up through the S$1.7300 level in thin trading, stronger resistance at S$1.7340 held firm.
Late in Asia, the U.S. currency was trading at S$1.7309, up from S$1.7259 late the day before.
The Philippine peso also slipped back, with the U.S. currency rising to close at 38.780 pesos, up from 38.725 at Thursday's close.
Trading in the rupiah was little affected by the confirmation that the International Monetary Fund had approved an additional $1 billion of assistance funding for Indonesia. At the end of the Asian day, the U.S. dollar was quoted at Rp 8,860, barely different from 8,870 on Thursday.