Most Asian currencies edged lower on Monday as the dollar retained a bullish tone following last week's robust US economic growth numbers.
The Singapore dollar eased a third of a percent from late Asian trade on Friday to about 1.6930 per US dollar, while the Indonesian rupiah weakened just over one percent to about 10,115 per dollar.
Dealers said persistent talk about a further revaluation of the Chinese yuan limited losses in Asian currencies, while a rebound in Seoul's equity market allowed the South Korean won to bounce back from an early dip.
The won firmed a fifth of a percent to 1,040 per dollar as the Korean stock market index rose 1.5 percent, mirroring big gains on Wall Street. Hyundai Motor Co and other exporters rose after news on Friday that the US economy grew a larger-than-expected annualised 3.8 percent in the third quarter.
"We've had pretty strong stock market increases across the board so this is helping some Asian currencies," said Richard Yetsenga, currency strategist at HSBC in Hong Kong.
The US data reinforced expectations for another rise in interest rates at Tuesday's Federal Reserve policy meeting.
The Fed is widely tipped to lift interest rates by a quarter percentage point to 4.0 percent, which would mark the 12th consecutive rise since June 2004.
"The rate move is discounted by markets and unless the Fed plays up inflation risks we should see a quiet first half of the week in Asian currency markets," said Philip Wee, currency strategist at DBS Bank.
Traders said the focus was still on the yuan, following a Financial Times report last week that US Treasury Secretary John Snow had told China's leaders Washington wanted to see another revaluation of the yuan before President George W. Bush visits Beijing next month.
"Stories about further yuan revaluation are dampening the impact of further dollar strength in Asia," one trader said.
The yuan has now appreciated just over 0.3 percent against the dollar since it was revalued by 2.1 percent on July 21.
Analysts say the fact the yuan has finally strengthened in the past three months by 0.3 percent, the maximum daily amount it can move against the dollar, shows Beijing is allowing some currency flexibility.
Dealers in Jakarta meanwhile cited nervousness ahead of this week's Indonesian inflation numbers and a covering of positions as reasons for the rupiah's move to its weakest level against the dollar in almost two weeks.
Inflation rose sharply in September to 9.06 percent and is expected to hit double digits by year-end following hikes in domestic fuel prices at the start of the month.
"There may well be nervousness about inflation but liquidity is also low, so I wouldn't read too much into today's price action," said Yetsenga at HSBC.
Holidays across the region this week contributed to thin trading conditions, dealers said. Markets in Singapore and Malaysia are closed on Tuesday, while Indonesian markets are closed between Wednesday and Friday.
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