Won strengthens to 17-month high
Won strengthens to 17-month high
Dow Jones, Singapore
The South Korean won and New Taiwan dollar continued their assault against the U.S. dollar Monday, advancing to fresh 17- month and 11-month respective highs.
The Indonesian rupiah also gained on the dollar, while the Philippine peso slipped. Trading in the Singapore dollar and Thai baht was limited because markets in Singapore and Bangkok were closed for public holidays.
The yen wasn't much of a factor in Asian currency markets as it was trapped in a narrow range against the dollar due to the Memorial Day holiday in the U.S. Monday.
In Seoul, verbal intervention by South Korean officials had only a minimal impact on the won as it strengthened to its best finish against the dollar since December 2000.
The dollar ended at 1,233.8 won, down from 1,243.2 won Friday.
Finance Minister Jeon Yun-churl said that while the appreciation of the won basically reflects South Korea's economic fundamentals, the government is concerned over the speed of the currency's appreciation.
The won has appreciated 8 percent against the dollar since mid-April.
The won dropped back after Jeon's comments, but the retreat was brief because few market players believe the government will actually intervene to support the dollar.
"Our government has no intention to buy U.S. dollars in the market," said Gin Lee, head of foreign exchange sales trading at BNP Paribas in Seoul. "Intervention will be very difficult because of worries about inflation."
Allowing the won to strengthen tends to reduce the cost of imported goods and keeps inflationary pressures from building.
Dollar selling was widespread, with exporters dumping the U.S. currency the most aggressively, dealers said.
The New Taiwan dollar edged higher in thin trading, closing at its highest level against the U.S. dollar since June 2001.
The dollar closed at NT$34.375 compared with NT$34.414 Friday.
With Singapore markets closed during Asian hours and with the U.S. holiday, turnover was thin, one dealer said.
Many participants were also sidelined because of fears of intervention by the Monetary Authority of Singapore, the dealer added. However, the central bank, which intervenes on a regular basis to stave off market volatility, was relatively inactive.
The Philippine peso fell to a four-week low against the dollar amid dollar short-covering by banks and rising corporate demand for the U.S. currency.
The dollar closed at 50.530 pesos on the Philippine Dealing System, up from 50.350 pesos Friday.
Traders said some banks opted to cover their short-dollar positions on growing perceptions that the central bank won't move to support the peso.
The rupiah strengthened despite market talk that efforts to sell PT Bank Niaga may have hit rocky ground.
The dollar closed at Rp 8,880, its intraday low, versus Rp 8,950 at Friday's close.
Indonesian officials remained quiet over the fate of PT Bank Niaga, a small bank that has become the latest test of the country's resolve to fix its broken banking system.
Jakarta set Monday as the deadline for final bids for Niaga from four shortlisted investors. Market speculation swirled that Indonesia is likely to reject the bids as being too low and reopen the bidding.