Southeast Asian monies mixed, won boosted by rise in yen
Southeast Asian monies mixed, won boosted by rise in yen
SINGAPORE (Dow Jones): A modest rise in the yen and gains in local equity markets boosted the South Korean won and New Taiwan dollar on Tuesday.
Southeast Asian currencies were mixed, with trading suppressed by a market holiday in Singapore. The Thai baht gained marginally on the dollar, while the Philippine peso and Indonesian rupiah were little changed.
Central banks across Asia have been cutting rates in recent months in light of slower economic growth, and in line with the U.S. Federal Reserve's shift toward easier monetary policy.
The New Taiwan dollar also got some help by the central bank, which sold U.S. dollars late in the day to quash a potential rally in the U.S. currency, dealers said.
At the close of trading the U.S. dollar was quoted at NT$32.362, down from NT32.368 late Monday.
The won rebounded after closing a day earlier at its lowest level in more than five weeks.
The won, like its Taiwan counterpart, benefited from a stronger yen and demand for local stocks. The North Asian currencies often mirror movements in the yen because they compete with Japan in many of the same export markets.
The dollar closed at 1,264.80 won, down from 1,273.3 Monday.
The outlook for the won, however, remains weak, considering the ease at which the dollar broke through the 1,268 won resistance level Monday, UBS Warburg said in a note to clients. The bank's short-term target for dollar remains 1,300 won.
The yen, which has been under pressure lately from Japan's ongoing political uncertainty and economic malaise, gained modestly against the dollar Tuesday after a top minister expressed concern about the yen's softness.
Late in Asia the dollar was quoted at Y118.51, down from Y119.06 late Monday in New York and Y119.31 late Monday in Tokyo.
The Indonesian rupiah closed lower Tuesday as healthy demand for dollars from local companies discouraged the expected liquidation of long dollar positions.
The dollar closed at Rp 9,880, up from Rp 9,845 Friday. Dealing was closed on Monday, a Muslim holiday.
"We canceled our plan to sell the dollar after local companies bought the dollar actively through local banks," said a dealer with a foreign bank.
Local companies have been buying the dollar since last month to pay offshore debts.
Banks were keen to sell the dollar to take profits following the U.S. unit's recent sharp rise.
Dollar selling from state banks - believed to be on behalf of Bank Indonesia - failed to curb the rise of the U.S. unit as the total amount was small, dealers said.
Given the strong demand for the dollar Tuesday, dealers expect the unit to test Rp 9,900 Wednesday.
The Philippine peso barely budged Tuesday with few new developments to influence it, dealers said.
The dollar closed at 47.660 pesos on the Philippine Dealing System, compared with 47.670 pesos Monday.
The peso gained Monday following a Supreme Court ruling affirming the legitimacy of Gloria Macapagal-Arroyo's presidency.
Dealers said the market is now awaiting steps by Arroyo to address economic concerns - including the widening budget deficit, slowing exports and lackluster economic growth.
Trade in the Thai baht was quiet with foreign exchange dealers in Singapore taking the day off in observance of the Muslim holiday Hari Raya Haji.
Late in Asia the dollar was quoted at 43.420 baht, down from 43.490 baht late Monday.