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.