Asian monies up as U.S. rate cut hopes fade<\/p>\n
Dow Jones, Kuala Lumpur<\/p>\n
Most Asian currencies tracked the Japanese yen higher Monday
\nas investors continued to unwind long U.S. dollar positions amid
\ndiminishing hopes of a U.S. interest rate cut.<\/p>\n
Investors are betting that U.S. stocks will slide if the
\nFederal Reserve opts to keep rates steady at its policy-setting
\nOpen Market Committee meeting Tuesday, and that could pressure
\nthe greenback.<\/p>\n
Keeping U.S. rates unchanged would do little to lift the U.S.
\neconomy, which in turn spells bad news for the rest of the world,
\nheavily dependent on the U.S. to buy their goods.<\/p>\n
The anticipation the Fed would not cut rates kept market
\nparticipants in Asia jittery, currency strategists said. As a
\nresult, dealings in Asian currencies were mostly thin and
\ncautious.<\/p>\n
The Singapore dollar, Indonesian rupiah, Taiwan dollar and the
\nKorean won all ended the day higher. The Thai baht was also
\nstronger in offshore dealings with the domestic markets were
\nclosed for a holiday.<\/p>\n
However, the Philippine peso closed lower against the dollar
\nas budget concerns led cautious participants to cover their short
\ndollar positions.<\/p>\n
Expectations are now focused on whether the Federal Open
\nMarket Committee at its Tuesday meeting will move from a
\n'neutral' to an easing bias, which would suggest rates could
\nstill be cut at a later stage.<\/p>\n
But some say changing the bias without cutting rates might not
\nbe the best solution.<\/p>\n
In Singapore, market participants largely ignored strong
\nsecond-quarter economic data issued early Monday as the headline
\nfigures were already announced by Prime Minister Goh Chok Tong in
\nhis National Day speech late Thursday.<\/p>\n
The Singapore economy expanded 3.9 percent on year in the
\nsecond quarter, higher than the 3.2 percent estimated earlier by
\nthe government.<\/p>\n
The Singapore dollar's strength against its U.S. counterpart
\nwas due to trading leads from the U.S. dollar's swings against
\nits regional counterparts rather than the strong GDP numbers,
\ndealers said.<\/p>\n
In late Asian trading, the dollar was quoted at S$1.7580, down
\nfrom S$1.7690 Thursday. Financial markets in Singapore were
\nclosed Friday for the national day holiday.<\/p>\n
The Indonesian rupiah also strengthened after the nation's
\nhighest legislative body ended its 11-day annual convention over
\nthe weekend without incident, which pointed to a lessening of
\npolitical risk.<\/p>\n
Dealers said the rupiah was also boosted by small but
\npersistent flows of funds into the country, which they suspected
\ncame from buyers of bank bad loans sold by the Indonesian Bank
\nRestructuring Agency recently.<\/p>\n
Last month, IBRA raised over Rp 17 trillion from the sales of
\nbad loans. Most of the buyers are believed to be the original
\ndebtors, who are now bringing back their cash to Indonesia to
\nsettle the purchases.<\/p>\n
The rupiah was also bolstered by remarks from the
\nInternational Monetary Fund, which said the government's efforts
\nto reduce the budget deficit to 2.5 percent of GDP this year from
\n3.7 percent last year is attainable.<\/p>\n
Late Monday in Asian trading, the U.S. dollar was quoted at Rp
\n8,850, down from Rp 8,960 Friday.<\/p>\n
The U.S. dollar also fell against the South Korean won, which
\ntook its cue from the higher yen.<\/p>\n
The Korean unit closed at 1,201.0 won, from 1,203.9 Friday
\nafter trading between 1,196.7 won and 1,202.0 won.<\/p>\n
The U.S. dollar ended at NT$33.870, down from NT$33.919
\nFriday. Dealings were valued at US$257 million, less than the
\n$316 million Friday.<\/p>\n
A dealer at a local bank said the central bank bought U.S.
\ndollars to slow the local unit's rise, but the amount wasn't
\nlarge.<\/p>",
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