Most Asian currencies weaken as U.S. dollar gains strength<\/p>\n
SINGAPORE (Dow Jones): The U.S. currency's rebound against the
\nyen during Asian trading on Friday also saw the dollar rally
\nagainst many of Asia's regional currencies.<\/p>\n
The Singapore dollar, the rupiah and the New Taiwan dollar all
\nslipped back in parallel with the yen. And even though the
\nPhilippine peso, the baht and the won succeeded in gaining ground
\nagainst the U.S. currency, many market observers are now
\nquestioning whether the recent rally in the regional currencies
\nis topping out.<\/p>\n
Asian regional currencies have strengthened markedly since the
\nFederal Reserve began trimming U.S. interest rates late last
\nmonth, precipitating an abrupt 18 percent slide in the U.S.
\ncurrency against the yen.<\/p>\n
\"The U.S. stepped in and cut interest rates, which led the yen
\nto strengthen. That triggered a rally in Asian regional
\ncurrencies, allowing monetary authorities across the region to
\ncut interest rates, injecting liquidity into the system and
\nstrengthening stock markets,\" explained Chua Soon Hock, chief
\nstrategist at Sanwa Bank in Singapore.<\/p>\n
Now, however, with the dollar surging up through Y119 in Asia
\non Friday, and many analysts targeting a return to levels around
\nY125, market participants are beginning to wonder whether the
\nregional currencies' bull-run is ending.<\/p>\n
In late trading in Tokyo, the dollar was trading at 119.12-15
\nyen, up from 117.82 yen in New York and 117.70-74 yen here late
\nThursday.<\/p>\n
\"The regional currencies will certainly give up some of their
\nrecent gains if the yen retraces to Y125\" to the dollar,
\npredicted Prasenjit Basu, Singapore-based regional economist at
\nCredit Suisse First Boston. But although mildly negative for the
\nregional currencies, a dollar rebound against the yen is unlikely
\nto trigger dramatic slides elsewhere in Asia, Basu argues.<\/p>\n
In fact, some market participants argue, a modest dollar
\nrebound against the yen may help dampen regional volatility and
\nusher in a period of relative currency stability. After weeks of
\nvolatile trading, the Singapore dollar, for example, is seen re-
\nestablishing itself as one of the steadiest currencies in Asia.<\/p>\n
During Asian hours, the U.S. currency has tended to hold
\nsteady or strengthen, in response to buying from Singapore banks.<\/p>\n
Late in Asia Friday, the U.S. dollar was trading at S$1.6275,
\nup from S$1.6236 at the same time Thursday.<\/p>\n
Although Asian trading Friday saw the Thai currency strengthen
\nagainst the U.S. dollar, market players are beginning to worry
\nthat the baht, too, is looking dangerously top-heavy.<\/p>\n
Late in Asia, the U.S. dollar was trading at 37.60 baht in the
\noffshore market, down from 37.69 baht towards the end of the
\nprevious Asian session.<\/p>\n
The level of the rupiah is causing less concern. Although it
\nended lower, the Indonesian currency remained relatively flat
\nthrough Friday's session, in marked contrast to the rollercoaster
\nvolatility seen earlier in the week, when it strengthened by
\nnearly 10 percent on Wednesday, only to hand back all its gains
\nthe following day.<\/p>\n
\"A lot of people who went short the dollar got a bloody nose,\"
\nwhen the U.S. currency rebounded on Thursday, said a trader at a
\nU.S. bank in Singapore. Nursing their wounds, those players are
\nnow holding back from the market; liquidity has dropped, spreads
\nhave widened, and trading has once more ground to a near
\nstandstill, according to traders.<\/p>\n
Late in the Asian day, the U.S. dollar was quoted at Rp 7,887,
\nup from Rp 7,725 the day before.<\/p>\n
Elsewhere in Asia, the New Taiwan dollar finished lower
\nagainst the U.S. currency, shadowing the fall of the yen. At the
\nclose of domestic trading the U.S. dollar was quoted at
\nNT$32.898, up from NT$32.878 the day before.<\/p>\n
The Philippine pesos, however, bucked the regional trend,
\nfinishing strongly higher, on healthy inflows attributed to
\nremittances from Filipino expatriates.<\/p>\n
At the close of trading on the Philippine Dealing System, the
\nU.S. currency was quoted at 42.050 pesos, down from 42.605 pesos
\nat Wednesday's close. Trading was suspended on Thursday as
\nFilipinos braced themselves for the onset of Typhoon Babs.<\/p>\n
In Seoul, the won also finished higher, on dollar sales
\nattributed to local exporters. At the end of the day, the U.S.
\ndollar stood at 1,316 won , down from 1,323 won the previous day.<\/p>",
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