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EMERGING CURRENCIES
Asian units fall against dollar, central banks intervene


Reuters
First Posted 11:03:00 09/02/2008

Filed Under: Economy, Business & Finance

SINGAPORE -- Asian currencies extended losses against a broadly stronger US dollar on Tuesday, prompting central banks in Thailand, Malaysia and Indonesia to sell dollars to support their currencies.

Thailand's deepening political turmoil put additional pressure on the Thai baht which fell about 0.6 percent to a one-year low at 34.49 per dollar, even as traders cited dollar-selling intervention by the central bank to help the local currency.

Thai Prime Minister Samak Sundaravej declared a state of emergency in Bangkok on Tuesday and gave the army control of public order after overnight clashes between pro- and anti-government protesters.

"The dollar jumps versus baht after the Prime Minister called for the state of emergency to halt street fighting," said a trader in Bangkok. "We expect intervention to take control of the market to decelerate upside move."

The Malaysian ringgit also fell 0.6 percent to as low as 3.4220 per dollar, its weakest level in a year. Traders suspected the central bank was intervening to prop up the ringgit.

Official intervention was also spotted in Indonesia, where the rupiah fell to a two-week low at 9,190 per dollar.

"It's not large. I think they realize that there is no point intervening aggressively in a dollar bull market," said a Jakarta-based trader.

The dollar hit an eight-month high against a basket of major currencies, boosted by a sharp drop in oil prices on expectations that hurricane Gustav's damage to US energy facilities may be smaller than feared.



Copyright 2009 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.



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