Regional monies mixed, mart edgy over ringgit<\/p>\n
SINGAPORE (Dow Jones): Southeast Asian currencies are mostly
\nmixed against the U.S. dollar in late Asian trading Wednesday
\nwith broader trading interest in these currencies grinding to a
\nhalt, said market players.<\/p>\n
With low liquidity in the rupiah and none in the ringgit,
\nmovements in the Singapore dollar and the Philippine peso were
\nthe highlights of Asian dealings in a rather choppy trading
\nsession, said market players.<\/p>\n
The biggest concern of interbank players in the regionals is
\nhow to handle their exposure to the ringgit, said market players.
\nTuesday, Malaysian Prime Minister Mohamad Mahathir said the
\ncountry would be reverting to a fixed exchange rate to insulate
\nthe economy.<\/p>\n
On Wednesday, Malaysia's central bank, Bank Negara, fixed the
\nU.S. dollar-ringgit exchange rate at 3.80. The move resulted in a
\ncomplete standstill in ringgit trading in offshore and onshore
\nmarkets.<\/p>\n
Developments in Malaysia and the spillover effect on Singapore
\ngrabbed the spotlight away from Hong Kong, where the spot and the
\nforward instruments have been under pressure.<\/p>\n
\"The draconian capital control measure taking hold in Malaysia
\nhas certainly shifted the regional focus away from Hong Kong, and
\nthe Hong Kong Monetary Authority can probably thank Bank Negara
\nMalaysia for providing the unexpected reprieve,\" said a treasury
\neconomist at MMS International.<\/p>\n
\"Traders are trying to clear the confusion surrounding the
\nringgit. There are a lot of details that need to be worked out.
\nWe understand that some banks have forward exposures in the
\nringgit for up to five years,\" said the regional currencies head
\nat a Japanese bank here.<\/p>\n
Everybody has stopped trading the ringgit. Tackling the
\n(ringgit) exposure is going to be a tedious process...if it can
\nbe solved at all,\" said Daniel Lian, head of Asian Markets
\nResearch at ANZ Investment Bank in Singapore.<\/p>\n
\"On the whole, there's very little trading interest in
\nSoutheast Asia,\" he added.<\/p>\n
But the U.S. dollar posted a sharp rise against the Singapore
\ndollar in Wednesday dealings, rising 2.4 percent to an intraday
\nhigh of S$1.7485. The view that the Singapore dollar needs to
\nweaken to enhance the country's competitiveness in the global
\nmarket spurred market players to sell the local currency, said
\nthe regional currencies head.<\/p>\n
The rise in the U.S. dollar versus the Singapore dollar was
\nalso fueled by the squeezing of interbank players' short
\npositions that were in place in early Wednesday dealings, said a
\ntrader at a Singapore bank.<\/p>\n
In late trading, the U.S. dollar is trading at S$1.7470, up
\nfrom S$1.7259 late Tuesday.<\/p>\n
The dollar is also higher against the baht after market
\nplayers unwound their positions in the Thai currency following
\ndevelopments in Malaysia.<\/p>\n
\"There was a lot of giving interests in the baht and baht
\nswaps today. There was some strong selling...basically, the yield
\ncurve came off sharply,\" said a regional currencies trader at a
\nmajor Thai bank here.<\/p>\n
The dollar is quoted at 40.9000 baht, up from 40.88 in late
\nTuesday trading.<\/p>\n
Bucking the trend in Southeast Asia was the Philippine peso,
\nwhich closed higher against the U.S. dollar in a choppy market
\nthat took its early cue from gains in the yen.<\/p>\n
At the close, the dollar averaged 43.067 peso on the
\nPhilippine Dealing System, down from Tuesday's 43.432. The dollar
\nfell to an intraday low of 42.820 and was last traded at 43.310.<\/p>\n
Dealers noted that around midday, early gains in the peso were
\neroded somewhat after the yen weakened very marginally from
\nearlier levels Wednesday to Y137.90 against the dollar. \"This
\ncaused banks to stay long on dollars,\" a trader with a foreign
\nbank said.<\/p>\n
The Hong Kong dollar is weaker late Wednesday, as interest
\nrates gradually eased throughout the day and speculative activity
\nwas minimal.<\/p>\n
Forward premiums on the currency fell as players closed
\npositions and investors slowed their hedging on Hong Kong dollar
\nexposure on the rebound in share prices Wednesday, traders said.<\/p>\n
\"It's commercial buying and selling so far\" and there's no
\napparent evidence that speculators are active in the market
\nWednesday, said a dealer with a European bank. \"The TT (spot
\ncurrency) market is very quiet,\" he added.<\/p>\n
In late trading, the Hong Kong dollar is quoted at HK$7.7495
\nagainst the U.S. dollar, compared with HK$7.7465 late Tuesday.<\/p>\n
In South Korea, the won settled higher Wednesday as the yen
\nremained relatively firm against the U.S. dollar in late Asian
\ntrade, traders said. The dollar ended at 1,340 won, down from
\nTuesday's close of 1,355 won, they said.<\/p>",
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