Asian currencies up on equity inflows<\/p>\n
Dow Jones, Singapore<\/p>\n
Asian currencies were mostly stronger in range-bound trading
\nFriday, supported by equity-related inflows which pushed the New
\nTaiwan dollar to a near 10-month closing high.<\/p>\n
But it was a generally listless session as market players
\nrefrained from taking new positions, just squaring positions
\nahead of the weekend and the July 4 Independence Day holiday in
\nthe U.S.<\/p>\n
The market remained wary about intervention, which analysts
\nsaid will keep a lid on the currency appreciation resulting from
\nportfolio inflows into the region.<\/p>\n
A "bullish FX view is muddied by FX intervention," as an
\nuncertain export recovery makes stronger currencies unwelcome,
\nsaid Vincent Low, head of foreign exchange and bond strategy for
\nAsia at Merrill Lynch.<\/p>\n
The U.S. unit closed at 34.390 against its Taiwan counterpart,
\ndown from NT$34.465 Thursday, in dealings worth $925 million, the
\nhighest so far this year. This was the dollar's lowest close
\nsince Sept. 10, 2002.<\/p>\n
"There's hot money coming in," said a Taipei-based dealer at a
\nlocal bank.<\/p>\n
There wasn't much bids for the U.S. dollar due to the holiday
\nin the U.S., while exporters were actively selling the currency,
\nsaid a foreign bank dealer in Taipei.<\/p>\n
He estimated the Taiwan central bank bought around $500
\nmillion to $600 million to slow the local dollar's rise. But
\ndealers said the central bank wasn't aggressively trying to
\nreverse the local dollar's trend.<\/p>\n
Taiwan's key stock index rose 1.1 percent to end at 56.54
\npoints, marking a fresh closing high for the year so far.<\/p>\n
Equity-related dollar inflows also helped the South Korean won
\nend higher for the fifth straight session, with the dollar
\nclosing at 1,180.2 won, down from 1,183.5 won Thursday.<\/p>\n
Some exporters also sold dollars at the 1,183 won level,
\ntraders said.<\/p>\n
Foreign investors were net buyers of 16.2 billion won worth of
\nshares Friday. In the previous session, they bought 519.2 billion
\nwon in local shares, the biggest amount of net buying in a single
\nsession since April 19, 2001.<\/p>\n
Equity inflows and government intervention will continue to be
\nkey factors to watch going forward.<\/p>\n
"All focus is on equity inflows Monday and how authorities
\nwill cope with that situation," said a Seoul-based trader.<\/p>\n
If intervention is unsuccessful, the dollar is likely to fall
\nbelow the key 1,180 won level and could even head for the lower
\n1,170s won, observers said.<\/p>\n
The Singapore dollar was modestly higher in thin trading ahead
\nof the July 10 release of the central bank's semiannual policy
\nreview statement and the government's advance estimates of
\nsecond-quarter economic performance.<\/p>\n
The U.S. unit was quoted at $1.7508 late in the local session,
\ndown from S$1.7516 Thursday.<\/p>\n
Gross domestic product is widely expected to contract in the
\nApril-June period, though most analysts now expect a rebound in
\nthe subsequent quarters.<\/p>\n
There was a spot of good news earlier Friday, as a better set
\nof data from the Purchasing Managers' Index suggested the key
\nmanufacturing sector may have bottomed out. The PMI broke above
\nthe threshold 50 percent mark to 50.8 percent in June, marking an
\nexpansion in manufacturing for the first time in four months.<\/p>\n
BNP Paribas said the PMI data reinforce its view that the
\nMonetary Authority of Singapore will stand pat on policy.<\/p>\n
Elsewhere, the Philippine market shrugged off data that
\nsuggested the economy might be running out of some steam, traders
\nsaid.<\/p>\n
The dollar ended at 53.40 pesos on the Philippine Dealing
\nSystem, little changed from 53.39 pesos in the previous session,
\namid thin corporate demand for the U.S. unit.<\/p>\n
The National Statistics Office Friday said inflation rose 3.4
\npercent on year in June, well above the 2.8 percent rise the
\nmarket had expected.<\/p>\n
Also Friday, the statistics office said exports contracted 4
\npercent on year in May, its second straight month of decline
\nafter a long spell of growth.<\/p>\n
The Indonesian rupiah edged up on the back of capital inflows
\nlinked to Bank Mandiri's initial public offering of shares, which
\ncloses Friday, dealers said.<\/p>\n
The dollar ended the local session at 8,185 rupiah, down from
\nRp 8,222 Thursday.<\/p>\n
Dealers said some foreign banks in Jakarta sold the dollar
\nlate in the session, likely on behalf of foreign investors who
\nare buying Bank Mandiri shares.<\/p>\n
The offer, which will raise around $330 million in cash for
\nthe government, has drawn strong demand from foreign investors.<\/p>\n
As against the Thai baht, the dollar was quoted around 41.69
\nbaht late in Asia, down from 41.765 baht Thursday.<\/p>\n
A trader at a European bank in Singapore said there was some
\noffshore selling in the dollar\/baht pair, but this was partly
\noffset by onshore buying.<\/p>",
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