DJ Asian Currencies Higher Late;Dlr Outlook Remains Bearish<\/p>\n
Alan Yonan Jr.
\nDow Jones
\nSingapore<\/p>\n
The dollar declined further against most Asian currencies
\nTuesday, reflecting the increasingly bearish global outlook for
\ncorporate America.<\/p>\n
The South Korean won, New Taiwan dollar, Thai baht and
\nSingapore dollar all strengthened to fresh multi-month highs. The
\nPhilippine peso also edged higher, while the Indonesian rupiah
\nwas unchanged.<\/p>\n
Falling stock prices and a rash of accounting scandals in the
\nU.S. have fueled a sharp decline in the dollar against most Asian
\ncurrencies during past four months, and analysts say the currency
\nhas more room to fall.<\/p>\n
\"Looking at the big picture, the dollar's recent decline is
\nnothing compared to the rise it has experienced (since the mid
\n1990s),\" said Hui Chin Chong, currency strategist at JP Morgan in
\nSingapore.<\/p>\n
The Federal Reserve's trade-weighted dollar index, a broad
\nmeasure of the U.S. currency's value, appreciated around 43
\npercent between 1995 and this February. Since then the index has
\nfallen less than 3 percent.<\/p>\n
\"Using our long-term model, JP Morgan still sees the dollar as
\novervalued by 5 percent and 10 percent,\" Chong said.<\/p>\n
JP Morgan is recommending investors take short dollar
\npositions against many of the Asian regional currencies.<\/p>\n
The Singapore dollar continued its advance, hitting a fresh
\n10-month high against its U.S. counterpart.<\/p>\n
The U.S. dollar traded as low as S$1.7338 in the morning
\nsession, but edged up to S$1.7365 after the Singapore government
\nissued disappointing export data for June.<\/p>\n
However, the interest in the U.S. dollar quickly waned and by
\nthe end of the day it had fallen back to S$1.7351, down from
\nS$1.7398 late Monday.<\/p>\n
Government authorities in Seoul tried in vain to slow the
\nwon's rise as the currency strengthened to a new 20-month high.<\/p>\n
The dollar closed at 1,171.8 won, down from 1,176.6 won
\nMonday.<\/p>\n
The dollar bounced off its intraday low of 1,169.5 won to a
\nhigh of 1,176.5 won after state-run banks bought about $200
\nmillion in the open market on behalf of the government to offset
\nbrisk dollar sales.<\/p>\n
The state banks entered the market after an official at the
\nMinistry of Finance and Economy said the government \"hasn't
\nchanged its will\" to stabilize the dollar\/won exchange rate.<\/p>\n
But the overwhelming market sentiment against the dollar
\nfueled selling that quickly erased most of the currency's gains.<\/p>\n
Taiwan's central bank also continued its effort to cap the
\nlocal currency's rise. U.S. dollar purchases by the central bank
\naccounted for around two-thirds of the total US$1.06 billion
\ntotal trading volume, dealers estimated.<\/p>\n
Despite the intervention, the U.S. dollar fell to a fresh 14-
\nmonth low of NT$33.100, down from NT$33.206 Monday.<\/p>\n
Exporters, who generate a substantial amount of their earnings
\nin U.S. dollars, aggressively sold the currency on fears that it
\nwould fall even further.<\/p>\n
The dollar fell to a 23-month low against the baht after a
\nfall through a 40.500 baht support level triggered stop loss
\nselling.<\/p>\n
Near the end of Asian trading the dollar was quoted at 40.350
\nbaht, down from 40.720 baht a day earlier.<\/p>\n
The next support level for the dollar is seen at 40.300 baht,
\nand a break through that sets up a test of the key 40.000 baht
\nlevel.<\/p>\n
Against the peso, the dollar closed at 50.400 pesos on the
\nPhilippine Dealing System, down from Friday's close of 50.495
\npesos.<\/p>\n
Philippine financial markets were closed Monday for local
\nelections.<\/p>\n
The U.S. currency's slide against the peso was slowed by
\ndollar demand from corporations, particularly the oil companies,
\ntraders said.<\/p>\n
The rupiah closed off its lows after the government managed to
\nraise $125 million through the sale of a small stake in PT
\nTelekomunikasi Indonesia.<\/p>\n
The dollar had traded as high as Rp 9,095 in early trade amid
\ncontinued local corporate demand for the U.S. currency.<\/p>\n
The prospect of foreign inflows associated with the sale of
\nthe Telekom stake pushed the dollar to Rp 9,040 at the close,
\nunchanged from Monday.<\/p>",
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