Thailand inspires fatigued Asian currencies: Dealers
Thailand inspires fatigued Asian currencies: Dealers
SINGAPORE (Reuters): Asian currencies were off their highs but
relatively firm yesterday as traders turned towards Thailand's
brightening prospects after an event-filled weekend in Indonesia
failed to stir fresh interest.
Talk of strong buying of the Thai baht, Malaysian ringgit and
Singapore dollar by large U.S. investment houses and even the
Brunei government's investment arm kept the U.S. dollar on soft
ground in Asia, dealers said.
But it perked up against regional currencies after rising
above 129.00 yen in late trade on fresh concerns about Japan's
banking system when a Liberal Democratic Party official said 10
Japanese banks may have negative net worth.
Dealers said trading volumes had improved and Asian currencies
were benefiting from a belief that the Indonesian sickness might
not be as contagious as once thought.
"A differentiation between countries and currencies is
becoming more evident and market players are more willing to buy
Asian currencies on the back of positive developments
domestically while keeping in mind the poorer state of health in
others," Banque Paribas said in a daily report.
But dealers remained reluctant to predict a trend.
"Everything is quite delicate. At the current level, prices
could go either way," a U.S. bank dealer in Singapore said.
In Indonesia, the rupiah dipped through the 10,000 per dollar
level in late trade, but flows were limited as uncertainty about
a currency board proposal continued to dog the market.
The Thai baht remained the darling of Asian currencies,
briefly rising above the 40.00 per dollar level, and prompting
central bank governor Chaiyawat Wibulswasdi to hint at the
prospect of lower interest rates.
Elsewhere, the Singapore dollar came off after breaching the
1.60 level to the U.S. dollar on early buying by U.S. investment
houses.
Dealers said the Singapore dollar reached a peak of 1.5960 in
London and New York markets on Friday on the back of U.S.
investment house buying.
The Malaysian ringgit backed off its highs after encountering
dollar bids near the 3.70 level, but dealers said it showed
potential to head higher amid talk that Brunei had sold $1.5-$2.0
billion last week.
The Philippine peso's rise was thwarted as large banks and
companies started buying the dollar near its low of 39.29 pesos.
In north Asia, the South Korean won was the star performer,
surging through 1,500 to the dollar amid ample dollar liquidity
and slower than usual demand.
The Hong Kong dollar was steady while forwards and interest
rates softened as major banks unloaded funds amid calm in
regional currency markets.
The Indian rupee hovered in a dull range as traders awaited
the formation of the country's next government.