U.S. dollar weakens against most Asian monies
U.S. dollar weakens against most Asian monies
Dow Jones, Singapore
The dollar weakened against most Asian currencies, managing to
muster modest gains only against the South Korean won and
Philippine peso.
In the Philippines, investor concerns about the country's
widening budget deficit kept the peso under pressure.
In Seoul, Korean officials once again came to the dollar's
rescue, persuading state-run banks to buy the U.S. currency in
the open market to keep it from falling against the won.
The Korea Development Bank and other state-run institutions
were back in the market for the second day in a row, traders
said. The banks bought around US$500 million on Thursday to prop
up the dollar. Dealers estimate state-run banks bought around
$100 million Friday on behalf of the government.
The dollar closed at 1,182.8 won up from 1,179.5 won Thursday.
The Ministry of Finance reiterated that it is concerned about
the won's "excessive" rise against the dollar and will continue
to take necessary steps to stabilize the currency market.
Authorities in Korea and elsewhere in Asia have expressed
concern that rapid appreciation of their currencies against the
dollar could hurt the price competitiveness of their exporters.
Ongoing investor concerns about the deteriorating fiscal
situation in the Philippines pressured the peso.
The dollar closed at 50.495 pesos on the Philippine dealing
system, up from 50.335 pesos Thursday.
The country's finance secretary was quoted this week as saying
the government will probably miss its six-month budget deficit
target by about 40 billion pesos.
The deficit through May stood at 107.5 billion pesos, 83
percent of the full year goal of 130 billion pesos.
"The government hasn't run a second half fiscal surplus since
1994, so it would seem that the odds are against them of meeting
the 130 billion pesos target," Deutsche Bank said in a note to
clients.
Indications from the Thai government that it won't stand in
the way of a strengthening baht provided a green light for
further appreciation of the currency.
Near the end of Asian trading the dollar was quoted at 41.085
baht, down from 41.190 baht late Thursday.
Thai Prime Minister Thaksin Shinawatra told reporters that the
weakness in the U.S. dollar is likely to continue in the near-
term.
"The Thai baht and its regional peers are likely to strengthen
further in a way that is difficult to control," he said.
Thailand's rising trade surplus, steady portfolio capital
inflows and official tolerance of a gradual rise in the baht
suggests the Thai currency can build on the 7 percent
appreciation against the U.S. dollar it has achieved so far this
year.
The U.S. dollar gave up early gains against the Singapore
dollar to finish lower in line with its decline against the yen.
Near the end of Asian trading the U.S. dollar was quoted at
S$1.7471, down from S$1.7502 late Thursday.
Various bank research departments are forecasting the U.S.
dollar to fall to anywhere from S$1.7400 to S$1.7000 by year end,
depending on its performance against the yen.
U.S. dollar buying by Taiwan's central bank helped the
currency maintain an even keel against the New Taiwan dollar.
The U.S. dollar finished at NT$33.284, unchanged from
Thursday.
Short-covering by interbank traders also helped the U.S.
currency, but its gains were offset by exporter U.S. dollar sales
and the closing of U.S. dollar accounts by depositors.
Against the rupiah, the dollar was quoted at Rp 9,080 late in
Asian trade, down from Rp 9,125 a day earlier.
The Indonesian central bank reportedly sold dollars to lift
the rupiah in quiet, pre-weekend trade.