20000201

Indonesian rupiah

JAKARTA: Indonesia's rupiah traded in a narrow range on Monday with players on the sidelines awaiting any fallout from a report by a commission of inquiry implicating six generals in last year's East Timor violence.

With relations between the military and the government at the heart of Indonesian political risk, dealers said the market was watching to see whether President Abdurrahman Wahid made any move to fire General Wiranto, former head of the military, from the cabinet.

The rupiah was quoted at 7,395/7,415 versus 7,390/7,420 in late local trade on Friday.

"There has been some steady corporate interest in dollars, but in terms of politics the main issue is what will happen to Wiranto now," said the head of treasury at a foreign bank in Jakarta.

Dealers said the market was also awaiting this week's meeting of Indonesia's donors, although no surprises were expected. The World Bank says Indonesia will need $4.2-4.7 billion from donors in the Consultative Group on Indonesia this year.

If support at 7,500 were to give way, dealers said, the currency could come under heavy pressure.

But they said the resumption of loan payments to Indonesia could help the currency hold up. The World Bank last week disbursed $300 million to Indonesia and the International Monetary Fund is due to meet on February 4 to discuss its latest agreement with Indonesia.

If the agreement is approved, Indonesia will win an IMF package worth $5 billion over three years, with a first tranche of up to $400 million disbursed immediately.

There was little impact from Indonesia's latest economic data, which showed January month-on-month inflation falling to 1.32 percent from 1.73 percent in December, and year-on-year inflation dropping to 0.35 percent in January from 2.01 percent in December.-Reuters

Chinese yuan

SHANGHAI: China's yuan ended up slightly against the dollar at its highest closing level in more than two months on Monday as domestic banks bought the local unit ahead of the Chinese Lunar New Year, dealers said.

Banks bought as companies needed more yuan for workers' bonuses ahead of the Lunar New Year, which is also traditionally a period of heavier spending, they said.

The yuan ended at 8.2778 to one U.S. dollar against 8.2780 on Friday after moving in a range of 8.2775 and 8.2798. It was the highest closing level since November 12, when the yuan finished at 8.2775.

"Yuan buying by domestic banks continued to be active due to increased demand ahead of the Lunar New Year," said a dealer at a local bank.

The yuan was likely to move around 8.2780 ahead of the holiday, dealers said.

The China Foreign Exchange Trade System will be closed from February 5 to February 11 for the holiday. Trading will resume on February 12.

The yuan closed higher against the Japanese yen at 7.6525 to 100 yen against 7.8769 on Friday. It ended slightly higher against the Hong Kong dollar at 1.0635 to HK$1.0 from 1.0640. -Reuters

S.Korean won

SEOUL: The South Korean won ended weaker against the dollar on Monday as strength in the dollar versus the yen lent support to the greenback sparking a flurry of short-covering, dealers said.

But the local unit was off its lowest levels by late trade as players who were bullish on the dollar in the morning turned to dollar selling, they said.

The won closed the day at 1,123.2 to the dollar, compared to Friday's close of 1,120.0

It opened at 1,124.0 and ranged between 1,123.0 and 1,127.0. "The won/dollar pair was stuck in a narrow range for most of the day as the market saw well-balanced supply and demand for the U.S. currency," said a dealer at a domestic bank.

Dealers said the sudden steep rise in the dollar versus yen on Friday triggered a flurry of dollar buying by both local and offshore players.

The Japanese yen was hovering around 106.83/88 , compared to Friday's New York close of 107.08.

Those who expected further strength in the dollar/yen began heavily buying dollars near 1,125 won propelling the won lower, dealers said.

But the market faced selling pressure from export deals and settlements of foreign equity buying, they said.

With talk of a smaller-than-expected trade deficit in January filtering into the market toward the close, the greenback retreated further to the won, said another dealer at a foreign bank.

He said the market was largely expecting a trade deficit of around $100-200 million in January, sharply down from earlier expectations of a $700 million deficit.

The Ministry of Commerce, Industry and Energy will release trade data on Tuesday. -Reuters

Philippine peso

MANILA: The Philippine peso closed weaker but off its day-low on Monday as investors opted to position in dollars ahead of the U.S. Federal Reserve's decision on interest rates.

The peso settled at 40.57 to the dollar from 40.45 on Friday.

"Foreign players are wary of taking a short position or going long on the peso right now because of the expected Fed rate hike on February 2," a trader from a local bank said.

Although a 25 basis point increase in U.S. rates has been discounted, the possibility of a 50 basis point hike inspired dollar positioning, the trader said.

The peso touched an intra-day low of 40.65 in morning trade as the Thai baht and other regional currencies weakened, but regained some ground later in the session.

"We expected the peso to open weak, but there was a lack of commercial demand," a trader said. "People who were long on dollars had to sell down."

Traders said the peso would seek direction from other regional currencies on Tuesday, and keep within a range of 40.45 to 40.70.-Reuters

Taiwanese dollar

TAIPEI: The Taiwan dollar ended with firm gains on Monday as exporters sold U.S. dollars to close the books on January accounts and prepare for Lunar New Year.

Dealers said they detected little central bank activity in the market, emboldening interbank traders to take the local unit higher in late trade after a sluggish morning session.

CLOSE: T$30.699 to the U.S. dollar, up T$0.025 from Saturday's finish at T$30.724

TURNOVER THROUGH DEALERS: Relatively active at US$432.5 million, up from US$175.5 million in Saturday's half-day session but well below Friday's very busy US$742.5 million. On the smaller Cosmos exchange, the Taiwan unit closed at T$30.692, advancing from Saturday's T$30.714 close. Cosmos turnover was US$105, up from US$75 million in the abbreviated Saturday session and down from US$135.5 million on Friday.

"Today's Taiwan dollar rise was mainly due to U.S. dollar selling by exporters," said one dealer at a major local bank.

"Central bank intervention was limited, so the Taiwan dollar sucessfully broke through the T$30.7 and the T$30.69 barriers," he added. The Taiwan dollar ranged as high as T$30.688 on Monday.

Dealers said breaks through technical resistance also encouraged interbank traders to short the greenback, as the central bank appeared ready to allow the Taiwan unit to appreciate further ahead of the Lunar New Year.

The Taiwan dollar was expected to reach as high as T$30.660 before foreign exchange markets close for the Lunar New Year holiday from February 4 to February 7. -Reuters