S'pore dollar, Thai baht strengthen on rupiah's surge
S'pore dollar, Thai baht strengthen on rupiah's surge
SINGAPORE (Dow Jones): Asian currencies rose across the board against the U.S. dollar late Wednesday, boosted by the yen's slight rebound and heavy stock market inflows to the region.
Analysts said the Indonesia rupiah's surge also helped buoy the Singapore dollar and the Thai baht in particular, both of which had deviated from the general trend the previous day and declined against the U.S. currency.
A slew of good news from Indonesia allowed the rupiah to make significant gains in the past 24 hours to Rp 7,280 against the U.S. dollar late Wednesday, compared with Rp 7,420 late Tuesday.
Analysts attributed the rupiah's rise to both signs that a standoff between the Indonesian President Abdurrahman Wahid and embattled former armed forces chief, Gen. Wiranto, will soon blow over peacefully and to the removal of key management officials at automaker Astra International.
Meanwhile on Tuesday, the Indonesian government fired Astra's president director and chief financial director on the ground the two officials had obstructed the sale of a 45 percent stake to foreign investors.
The sale of the stake to a U.S. investor group would help the government, which owns a controlling stake in the company, to plug its budget deficit as well as facilitate the company's debt restructuring.
Steven Brice, treasury economist at Standard Chartered Bank, said the Astra development sends an important signal that the Indonesian government is committed to corporate restructuring.
Against the South Korean won, the U.S. dollar is quoted at 1,123.1 won late Wednesday, lower than 1,128.8 won late Tuesday.
Heavy equities inflows - the South Korean stock market climbed 1.5 percent Wednesday - as well as investments into domestic assets fueled the won's strength, which observers say could soon trigger central bank action.
The Bank of Korea wasn't seen in the foreign exchange market Wednesday, dealers said.
However, analysts say the yen's relative weakness is certain to prompt some dollar-buying soon by the Korean central bank to prevent the won from strengthening too far and hurting the country's export competitiveness with Japan.
The U.S. dollar is quoted at S$1.6912 late Wednesday, down slightly from S$1.6948 late Tuesday.
Analysts said the Singapore dollar's greater sensitivity to G- 7 currency movements prevented it from rising Tuesday along with other Asian currencies.
"The Singapore dollar's correlation with the yen is a lot stronger than that of other Asian currencies," said Lian Chia Liang, Asian currency strategist at Merrill Lynch.
Against the Thai baht, the U.S. dollar is quoted at 37.545 baht late Wednesday, down from 37.625 baht late Tuesday.
The U.S. dollar is also quoted at 40.460 pesos in Manila, lower than 40.498 pesos late Tuesday.
And in Taipei, the U.S. unit is trading at NT$30.665, down from NT$30.731 late Tuesday.