SINGAPORE, July 17: Asian currencies were largely unchanged on Wednesday ahead of a testimony by the Federal Reserve Chairman Ben Bernanke but the Singapore dollar slipped after June exports showed a further fall in shipments of electronics.
Bernanke is set to appear before Congress on Wednesday and Thursday, which could provide clues on the timing of the Fed’s planned reduction in its monthly bond-purchases of $85 billion.
‘The Fed chairman would likely not detract much from last week’s tone, although a reiteration of last week’s rhetoric may well be sufficient to encourage further adjustments against the greenback in the current environment,’ OCBC Bank said in a note.
On July 10, Bernanke said the Fed needed to keep its easy monetary policy in place for the foreseeable future, lifting emerging Asian currencies.
The Taiwan dollar and the South Korean won briefly hit their highest in more than five weeks, but then gave up most of the gains as investors cut long positions.
The Malaysian ringgit and the Philippine peso turned slightly weaker.
The Asian Development Bank said on Tuesday it has cut its growth forecast for developing Asia by 0.3 percentage points to 6.3 percent in 2013 and 6.4 percent in 2014.
Some traders said regional units may not rise much if Bernanke maintains the stance on easy liquidity conditions as they have priced in such expectations.
SINGAPORE DOLLAR
The Singapore dollar turned weaker as data showed electronics exports in June fell 12.4 percent from a year earlier after a 13.2 percent drop in May.
Before the figures, the Singapore dollar advanced as much as 0.2 percent to 1.2567 to the U.S. Dollar.
The city-state unit has a chart resistance at 1.2564, the 50 percent Fibonacci retracement of its depreciation between May and July.
RUPIAH
The rupiah’s indicative prices eased 0.1 percent to 10,400, the weakest since September 2009, on corporate dollar demand.
But the rupiah traded weaker than the level with some bidding dollars above 10,100, while the central bank sold the greenback at 10,040, traders said.
One-month dollar/rupiah non-deliverable forwards also rose 0.6 percent to 10,380.
The central bank governor said there was no need to be concerned about the current rate of the rupiah, saying the economy would improve.
‘They may allow further depreciation, but they will keep intervening,’ said a Jakarta-based trader.
TAIWAN DOLLAR
The Taiwan dollar rose to 0.3 percent to 29.778 to the greenback, the strongest since June 10, on inflows from foreign financial institutions.
But the island’s currency gave up some of gains as traders cut long positions in thin trading.
The Taiwan dollar was expected to stay around 29.800 in the day as investors awaited Bernanke’s testimony.
WON
The won earlier advanced 0.3 percent to 1,114.5 per dollar, the strongest since June 7, on exporters’ demand for settlements.
But the South Korean currency pared some of the gains as offshore funds sold it and on growing caution over possible intervention by the foreign exchange authorities to stem its upside.
‘Bernanke holds a key for now. But it may be a time to see the won’s weakness. That is why it could not extend gains,’ said a senior foreign bank trader in Seoul.
The won was the best performing emerging Asian currency since last week with a 2.2 percent gain against the dollar during the eight trading session, according to Thomson Reuters data.
(AGENCIES)
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