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.