Won ascends but rupiah slips from 5-month high
Won ascends but rupiah slips from 5-month high
SINGAPORE (Dow Jones): The South Korean won strengthened despite government intervention, but the Indonesian rupiah fell back from a five-month high in choppy trading in Asian foreign- exchange markets Tuesday.
Other regional currencies were mostly a touch stronger.
After being sold down to an intraday low of 1,197.10 won from the open, the U.S. currency was forced back up to a high of 1,205.00 won, before slipping again to close at 1,198.00, down a touch from 1,200.00 at Monday's close.
"There is quite a bit of intervention going on," the country treasurer at a U.S. bank in Seoul explained.
Despite the market's volatility, most dealers expect the won to continue to trade around present levels, with the U.S. dollar oscillating around the 1,200 won mark as long as the U.S. currency remains in the vicinity of 120 against the yen.
Although trade and investment flows are both strongly won- positive, the U.S. dollar is being supported by the Korean government.
The current dollar-buying by government banks comes less than two weeks after the Korean finance minister, Lee Kyu-sung, announced plans to soak up $4.6 billion of dollar liquidity from the foreign-exchange market in the second quarter.
Elsewhere in Asia, the Indonesian rupiah rose to hit its highest level since mid-December in early trading, before profit- taking kicked in and forced it lower again.
After being sold down to 7,590 rupiah, buying from Hong Kong and Jakarta lifted the U.S. dollar to Rp 7,865 toward the end of Asian trading hours, up from Rp 7,780 late the day before.
"The onshore market has been buying dollars all the while. Today we also saw some buying coming from the offshore market," a rupiah trader at a U.S. bank in Singapore said.
With the rupiah up 20 percent from lows seen earlier in the year, and the U.S. currency falling to levels approaching the Indonesian government's target exchange rate of Rp 7,500, "it is only logical for the market to take some profits" he said.
The Singapore dollar also slipped from its intraday high Tuesday, as traders scrambled to buy U.S. dollars after solid bidding interest caught the market short of the U.S. currency, according to brokers in Singapore.
After finding support from bids placed at S$1.7960 by local banks, the U.S. dollar was bought back up, to end Asian trading at S$1.6984, down from S$1.7001 late the day before.
The Thai baht continued to edge higher, with dealers reporting generally upbeat sentiment in quiet trading. Toward the end of Asian trading, the U.S. dollar was quoted at 36.7350 baht, down from 36.8200 the previous day.
Activity was also relatively light on the Philippine Dealing System, where the peso pushed to a 13-month high. At the close, the U.S. dollar was quoted at 37.600 pesos, down from 37.650 pesos, on trading volumes of just $157 million.
Against the New Taiwan dollar, the U.S. currency closed at NT$32.735, down from NT$32.761 at the end of Monday's session.