Southeast Asian currencies slip lower in listless trading
Southeast Asian currencies slip lower in listless trading
SINGAPORE (Dow Jones): Southeast Asian currencies slipped a touch lower against the U.S. currency, sold down in listless trading in Asia on Tuesday in response to fall in the value of the Japanese yen.
With market participants expecting Japanese monetary officials to continue to attempt to guide the U.S. dollar/yen exchange rate up towards 120 yen in the approach to the end of Japan's fiscal year on March 31, most dealers are predicting further U.S. dollar appreciation against the regional currencies over the next week.
Despite Thailand's signing of a fresh letter of intent to the International Monetary Fund late Monday, committing the government to fresh banking sector reforms, few traders would be surprised to see the U.S. currency creep higher against the baht.
Late Tuesday in Asia, the U.S. dollar was trading at 37.5300 baht, up from 37.4650 baht late Monday.
The Singapore dollar also ended Asian hours lower on Tuesday, with dealers in Singapore saying that the local currency attracted unusually strong selling interest.
Toward the end of Asian trading, the U.S. dollar was quoted at S$1.7326, up from S$1.7270 late in Asia the day before.
The Indonesian rupiah also closed Asian trading down. In recent months many observers have predicted the U.S. dollar would rally beyond 10,000 rupiah ahead of parliamentary elections scheduled for June. Now, however, some cast doubt on those forecasts.
"The rupiah has already priced in further social conflict and instability ahead of the elections," said Daniel Lian, head of Asian markets research at ANZ investment bank in Singapore.
With little potential flight capital still remaining in Indonesia, and foreign players for the most part shunning all exposure to the country, current foreign exchange market flows are not sufficient to push the U.S. dollar significantly higher, Lian said.
On the other hand, he also felt the 7,500 rupiah exchange rate target described Tuesday by Sjahril Sabirin, Bank Indonesia's governor, was somewhat overly optimistic.
"I don't see how that can be realized until there is a solution to Indonesia's political vacuum," he said.
The rupiah closed Asian trading at 8,910, compared with 8,900 on Monday.
Elsewhere in Asia, trading on the Philippine Dealing System ended with the peso slightly weaker on the day. At the close, the U.S. dollar was quoted at 38.760 pesos, up from 38.710 pesos at Monday's close.
In North Asia, both the new Taiwan dollar and the South Korean won closed lower.
Against the new Taiwan dollar, the U.S. currency ended at NT$33.127, up from NT$33.106 at Monday's close.
Against the won, the U.S. currency closed at 1,225.00 won, compared with 1,222.60 won at the end of the previous session.