Thai Baht, Singapore dollar rise; S. Korean won declines
Thai Baht, Singapore dollar rise; S. Korean won declines
Bloomberg Singapore
The Thai baht and Singapore dollar rose after crude-oil prices fell from a record high, easing concern that growth in regional profits and economies will slow.
Asian currencies fell in the past six months against the dollar, partly as importers sold more of their currencies to pay for oil, denominated in U.S. dollars. The region buys almost a third of the world's supply of crude.
"If oil prices are retreating, and the move down is considered substantive, it should provide relief for Asian currencies," said Philip Wee, an analyst in Singapore at DBS Group Holdings, Southeast Asia's biggest lender.
The baht gained 0.2 percent to 41.49 against the dollar as of 9:07 a.m. Bangkok time, and the Singapore dollar rose 0.1 percent to S$1.6919. Indonesia's rupiah traded at 9,174. The Taiwan dollar was little changed at NT$33.99, according to Taipei Forex Inc.
The Asia-Pacific region bought 29 percent of the world's crude oil last year, according to BP Plc, Europe's largest petroleum company.
Crude oil for November delivery fell for a second day, sliding as much as 0.5 percent to $49.26 a barrel. The decline cut this year's price gain to 51.8 percent.
The International Monetary Fund yesterday said in a report that it cut its 2005 forecasts for Asia's emerging economies, partly because of higher oil prices.
Korean Importers
The region may grow 6.5 percent next year, less than the 6.8 percent expansion forecast in April, the Washington-based lender said in its World Economic Outlook. The IMF raised its forecast for growth this year to 7.3 percent from 7.2 percent.
In South Korea, the won fell on speculation importers will today buy more dollars to pay for costlier oil after financial markets were closed for a three-day holiday that ended yesterday.
"Importers need to buy more dollars to pay for the higher priced oil," weakening the won, said Chang Yong Han, a currency trader at Koram Bank in Seoul.
The won traded at 1,153.80 against the dollar from 1,149.40 on Sept. 24, according to Seoul Money Brokerage Services Ltd.
Koram, which was purchased by Citigroup Inc. in May, will be renamed Citibank Korea Inc., the Korean bank said on Sept. 8 in a statement.
Steven Chang, vice president of global markets at State Street Bank & Trust Co. in Hong Kong, said he may buy currencies such as the Australian dollar against Asian counterparts.
Australia's currency may extend the 1.6 percent gain in the past month against the U.S. dollar as prices of commodities such as copper and gold rise, raising exporters' revenue prospects. Exports account for a fifth of the Australian economy and raw materials make up two-thirds of overseas shipments.
Copper prices in New York rose to the highest in almost seven months. Gold futures traded near a five-week closing high.
Still, most Asian currencies strengthened today after a report showed U.S. oil inventories unexpectedly rose last week.
The Philippine peso traded at 56.27 from yesterday's 56.315, according to Bankers Association of the Philippines.
The peso may gain to "better than 56" against the dollar starting in October, boosted by demand from families of overseas Filipino workers, central bank Deputy Governor Amando Tetangco on Sept. 28 said in a mobile-phone text message from Manila.
Nestor Espenilla, assistant central bank governor, told reporters in London on Sept. 27 that the bank may seek to "smooth out disturbances in the market" by buying pesos.
A falling currency becomes a concern if it stokes inflation through higher import prices, the central bank's Espenilla said.
It's also a "worry" for the government because it increases the foreign-debt burden, Finance Secretary Juanita Amatong said on the same day.
"I won't be surprised" if the central bank bought pesos, DBS's Wee said. "It's in their interest to cap the peso's decline.