Asian monies down, dollar questioned<\/p>\n
Alan Yonan Jr., Dow Jones, Singapore<\/p>\n
The dollar held its ground against most Asian currencies
\nThursday, although many analysts questioned whether its recent
\nrally is sustainable.<\/p>\n
After sinking to multi-month lows against several regional
\ncurrencies the dollar has stabilized over the past few sessions
\nas the outlook for U.S. equity markets has perked up.<\/p>\n
With many players short dollars globally, the dollar rally
\npicked up steam quickly on short-covering against not only Asian
\ncurrencies, but those in Europe as well.<\/p>\n
The latest batch of good news for the dollar came in the form
\nof a 7.8 percent surge in the NASDAQ Composite Index and a 3.1
\npercent rise in the Dow Jones Industrial Average overnight.<\/p>\n
The dollar rallied to a two-week high against the yen early in
\nthe Asian session, putting most other Asian currencies on the
\ndefensive.<\/p>\n
The Singapore dollar, Taiwan dollar, Philippine peso and Thai
\nbaht all tumbled, while the Korean won edged higher. Markets in
\nJakarta were closed for a public holiday and rupiah was confined
\nto illiquid offshore trade.<\/p>\n
Near the end of Asian trading, the dollar was quoted at 128.85
\nyen, unchanged from late Wednesday in New York. The dollar had
\nhit a high of 129.15 yen early in the day before Japanese
\nexporters began selling the U.S. currency to hedge their foreign
\nexchange exposure.<\/p>\n
Until it's latest rally, market sentiment was clearly running
\nagainst the U.S. dollar due to concerns about the strength of the
\neconomic recovery in the U.S. and the sustainability of the
\ncountry's current account deficit.<\/p>\n
\"But for now it appears that the reversal will be short-lived
\nif U.S. equity markets cannot follow through and concerns
\ncontinue over the resilience of the recovery in the United
\nStates,\" according to the bank.<\/p>\n
The Singapore dollar bounced around for most of the session,
\nthen slumped near the end of trading to finish at a one-week low
\nagainst its U.S. counterpart.<\/p>\n
The U.S. dollar's stellar performance overnight helped it open
\nat a solid S$1.8095 in Asia. A bout of profit-taking pushed the
\nU.S. currency down to its intraday low S$1.8060 before it began
\nto climb again on the strength of its advance against the yen.<\/p>\n
Near the end of Asian trading the U.S. dollar was quoted at
\nS$1.8114, up from S$1.8092 late Wednesday.<\/p>\n
Traders in Manila said most banks took the dollar's rebound
\nagainst the yen and other currencies as a signal to cover their
\nshort dollar positions against the peso.<\/p>\n
The dollar closed at 49.890 pesos on the Philippine Dealing
\nSystem, up from 49.820 pesos Wednesday.<\/p>\n
The Philippine market didn't react to comments from some
\ngovernment officials that the budget deficit for the first
\nquarter may have exceeded the 52.9 billion pesos ceiling.<\/p>\n
The government had warned the market earlier about front-
\nloading expenditures to stimulate the economy, so Thursday's
\nannouncement didn't come as a surprise, Bank of America said in a
\nnote to clients.<\/p>\n
The New Taiwan dollar faced selling pressure both in the spot
\nmarket and the offshore market for non-deliverable forwards.<\/p>\n
The U.S. dollar closed at NT$34.605, up from NT$34.588
\nWednesday.<\/p>\n
As was the case in other regional foreign exchange markets,
\nU.S. dollar short covering was the driving force behind the U.S.
\ncurrency.<\/p>\n
The Thai baht traded in a narrow range, finishing marginally
\nweaker. Near the end of Asian trading the dollar was quoted at
\n42.950 bath, up from 42.945 bath late Wednesday.<\/p>\n
The South Korean won managed to break from the influence of
\nyen weakness and finished stronger on the back of dollar selling
\nby exporters.<\/p>\n
The dollar ended at 1,282.4 won, below Wednesday's close at
\n1,285.4 won.<\/p>\n
Exporters normally offload dollars at the end of the month,
\nwhen they must balance their books. But the dollar's recent
\nvolatility has prompted some exporters to sell the U.S. currency
\non any price spikes.<\/p>\n
The exporters' activity helped offset the negative effect on
\nthe won resulting from net foreign sales of 96 billion won of
\nshares in the local stock market.<\/p>",
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