Yen weakness pulls down Asian currencies
Yen weakness pulls down Asian currencies
SINGAPORE (Dow Jones): A combination of yen weakness and local factors pushed Asian currencies lower across the region Monday, with the New Taiwan dollar plunging nearly 3 percent after the central bank quit propping up the currency late in the session.
The Indonesian rupiah suffered from the ongoing political turmoil in Jakarta, while sentiment toward the peso was hit by the latest in a series of tourist kidnappings at Philippines resorts.
Indonesia's President Abdurrahman Wahid Monday ordered security forces to take tough action to maintain law and order just days before Parliament meets to demand his impeachment.
Abdurrahman's security minister later said the announcement did not constitute a decree calling for a state of emergency or martial law, both of which have been threatened by Wahid recently.
The House of Representatives Wednesday is expected to demand that a higher assembly impeach the President for his corruption and incompetence by August. Abdurrahman has warned that attempts to oust him could trigger massive rioting and bloodshed.
Late in Asia, the dollar was quoted at Rp 11,590, up from Rp 11.450 late Friday.
Market players concerned over the deteriorating Taiwan economy, bailed out of the local currency and into U.S. dollars in a stampede that pushed foreign exchange trading volume to a record $1.948 billion on the day.
"The market is uncomfortable with Taiwan's economic fundamentals right now," said Bank of America strategist Frank Gong. The government reported last Friday that the economy expanded by a meager 1.06 percent in the first quarter from a year earlier, its worst performance in 26 years.
The U.S. dollar traded just below the NT$33.500 level for most of the Asian trading day, supported by aggressive U.S. dollar selling by the central bank.
However, the central bank stepped to the sidelines during the last hour of trading, allowing the dollar to soar to NT34.500 at the close, a 2.9 percent rise over Friday's close of NT33.495.
Monday's decline left the New Taiwan dollar at a 32-month low.
A drop in the yen set a softer tone for other Asian currencies. Toward the end of Asian trading Monday the dollar was quoted at 121.14 yen, up from 120.30 yen late Friday in New York and 120.14 late Friday in Tokyo.
In the Philippines, the Abu Sayyaf rebel Muslim group claimed responsibility Monday for abducting 20 people Sunday from the Dos Palmas Island Resort, 600 kilometers southwest of Manila. The same group seized 10 foreign tourists from a Malaysian resort 13 months ago. Most were released for large ransoms, reportedly paid to Libya.
"The market is watching out for the possibility that the hostage crisis is developing into a major test for the Arroyo government," Bank of America said in a note to clients.
The dollar closed at 50.770 pesos on the Philippine Dealing System, up from 50.505 pesos Friday
The South Korean won tracked the yen lower. The dollar finished at 1,294.0 won Monday, up from Friday's close of 1,288.9 won.
The Singapore dollar also slumped on the back of the weaker yen, but concerns over intervention by monetary authorities limited the local currency's downside.
Late in Asia, the U.S. dollar was quoted at 1.8115 Singapore dollars, up from S$1.8058 late Friday in Asia.
Against the Thai baht the dollar was quoted at 45.595 baht, up from 45.430 baht late Friday.