Asian currencies down as stock market falls<\/p>\n
SINGAPORE (Dow Jones): The drubbing on regional stock markets
\ncontinued to push Asian currencies lower late Tuesday.<\/p>\n
However, while a recovery in the yen provided a mild respite
\nfor some currencies in late trading, faltering investor
\nconfidence in the Philippines sent the peso reeling to a fresh
\n19-month low.<\/p>\n
The peso will likely remain frail as long as the conflict in
\nthe southern island of Mindanao between government military
\nforces and Muslim rebels remains unresolved and bombings in
\nManila continue to raise concerns over national security, market
\nobservers said.<\/p>\n
\"It's difficult to envisage any significant improvement in the
\nshort term,\" Bank of America strategist Simon Flint said.<\/p>\n
The dollar closed at 42.370 pesos on the Philippine Dealing
\nSystem, up 46 centavos from Monday's close of 41.915 pesos.<\/p>\n
Earlier in the session, the dollar climbed to a fresh 19-month
\nhigh of 42.375 pesos, its highest level since hitting 42.560
\npesos Oct. 23, 1998.<\/p>\n
The drop in the peso helped erode the Thai baht, although the
\nJapanese yen's strength late in the day stemmed the Thai
\ncurrency's fall, they added.<\/p>\n
The dollar was at 39.275 baht, up from 39.000 baht late
\nMonday.<\/p>\n
\"There was a lot of outright selling interest in the baht -
\nbuying in dollars, selling in the baht and bidding for baht
\nswaps,\" the dealer at the Asian bank said. \"People are concerned
\nbecause of the outflow of the baht, due to the falling stock
\nmarket and the problems in the Philippines.\"<\/p>\n
Investors are also awaiting news from the central bank's
\nmonetary policy board, which is holding its first meeting late
\nTuesday.<\/p>\n
Bank of Thailand has adopted a flexible inflation-targeting
\nmonetary policy framework, and the target range for inflation may
\nbe set at the meeting. The upward limit of the inflation target
\nis expected to be around 4 percent.<\/p>\n
Other Asian currencies felt the brunt of regional stock market
\nweakness, dealers said. However, the currencies regained some
\nlost ground as the yen strengthened in late trading, they added.<\/p>\n
The South Korean won ended at its lowest level against the
\nU.S. dollar in nearly 13 weeks as share prices on the Seoul stock
\nmarket continued their recent downward spiral.<\/p>\n
The dollar finished at 1,134.40 won, up from Monday's close of
\n1,130.60 won its highest finish since Feb. 25, when it closed at
\n1,136.60 won.<\/p>\n
Against the Indonesian rupiah, the dollar rose to Rp 8,445,
\nfrom Rp 8,318 late Monday. The rupiah fell in line with other
\nregional currencies and as local companies bought dollars to
\nservice debt, dealers said.<\/p>\n
Due to the weakened rupiah, Indonesia's domestic inflation
\nrate is expected to creep up in May but will likely be capped
\nbelow 2 percent, State Statistics Bureau Chief Sugito Suwito said
\nTuesday.<\/p>\n
\"If the rupiah weakens to Rp 12,000 (against the dollar), then
\ninflation would be 2 percent, but the rupiah is unlikely to fall
\nthis far,\" Sugito said.<\/p>\n
The decline in the Taiwan stock market and political tensions
\nwith China lifted the U.S. dollar, which closed at NT$30.749,
\nfrom Monday's close of NT$30.709.<\/p>\n
It was the second straight session of decline for the local
\ndollar since the island's new government was sworn in Saturday.<\/p>\n
Dealers said the central bank tried to limit the fall of the
\nlocal dollar to around the NT$30.75 level, but offshore demand
\nfor U.S. dollars ran high because of its strength against
\nregional currencies.<\/p>\n
Against the Singapore currency, the U.S. dollar was at
\nS$1.7319, up from S$1.7277 late Monday.<\/p>\n
Dealers said they expect the Singapore dollar to continue its
\ndescent in coming days, although one said further declines could
\nprovoke intervention by the Monetary Authority of Singapore at
\nthe level of S$1.7350.<\/p>",
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