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Thursday, Jul 10, 2014

Business

Dollar weakens in Asia after Fed minutes

AFP | Thursday, Jul 10, 2014

TOKYO - The dollar eased in Asia Thursday as minutes from the Federal Reserve's June meeting suggested interest rates would stay low well into next year.

Indonesia's rupiah rallied as several polls indicated the pro-business candidate is set to become the next president of Southeast Asia's biggest economy.

In Tokyo late afternoon trading, the greenback fetched 101.53 yen (S$1.25), down from 101.64 yen in New York late Wednesday.

The euro bought $1.3647 (S$ 1.70) and 138.54 yen, against $1.3642 and 138.66 yen.

Minutes from Fed's June 17-18 policy meeting confirmed it plans to end its five-year, economy-boosting bond-buying scheme in October.

The timetable was expected following a slew of strong data out of Washington in recent weeks, the latest being last month's better-than-forecast jobs report.

The bank also said it expects not to hike interest rates for "a considerable time" after the stimulus programme ends. A rise in interest rates would tend to lift demand for the dollar.

"Market-wise, those positioned for a somewhat less dovish set of minutes... were disappointed and this may help explain market reactions" including a weaker dollar, National Bank Australia said.

In China official data showed the nation's monthly trade surplus jumped 16.4 per cent in June to $31.6 billion, as exports and imports both rose in the latest sign the Asian economic giant is getting back on track.

Indonesia's rupiah gained against the greenback as most unofficial tallies showed pro-business Jakarta governor Joko Widodo ahead of ex-general Prabowo Subianto in a closely fought race to become the country's president.

The dollar bought 11,555 rupiah Thursday, compared with 11,626 rupiah on Wednesday.

Both candidates declared victory Wednesday in the tightest and most divisive presidential election since the downfall of dictator Suharto in 1998.

However, polling agencies considered most reliable indicated a Widodo win, and the Jakarta benchmark index surged more than 2.5 per cent at the open on Thursday.

The dollar was mixed against most other Asia-Pacific currencies.

It weakened to S$1.2411 from S$1.2428 on Wednesday, to 32.16 Thai baht  from 32.33 baht, to 43.30 Philippines pesos from 43.36 pesos, and to Tw$29.89 from Tw$29.90.

It advanced to 59.78 Indian rupees from to 59.75 rupees, and to 1,013.45 South Korean won from 1,012.19 won.

The Australian dollar rose to 93.92 US cents from 93.36 cents, while the Chinese yuan was almost unchanged at 16.38 yen against 16.39 yen.

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