Asian currencies await U.S. rate verdict

Asian currencies await U.S. rate verdict

Netty Ismail, Dow Jones, Singapore

Asian currencies were mixed late Tuesday, with the market on
tenterhooks ahead of an anticipated interest rate cut by the U.S.
Federal Reserve later in the global trading day, dealers said.

The Indonesian currency took center stage, slipping below Rp
11,000 to the dollar. But it quickly regained its footing above
that psychologically important threshold.

That was the first time since President Megawati Soekarnoputri
took office July 23 that the dollar had traded above Rp 11,000,
as the slow pace of economic reforms in Indonesia tries the
market's patience.

The dollar closed at Rp 10,835, down from its close Monday at
Rp 10,940.

Trading in other Asian currencies was subdued, as participants
refrained from taking any major positions ahead of the Fed's
policy-setting meeting, dealers said.

The Singapore dollar and the Philippine peso were weaker. The
Thai baht and the New Taiwan dollar were steady, while the South
Korean won was slightly firmer.

The region's currencies have priced in expectations of up to a
50 basis-point cut in U.S. interest rates.

Foreign direct and portfolio investment inflows bolstered the
South Korean won, dealers said.

The dollar finished at 1,295.6 won, lower than 1,297.5 won
Monday.

The New Taiwan dollar ended at NT$34.526 against the U.S.
dollar, unchanged from Monday's close.

The Singapore dollar's rebound Monday proved to be short-
lived. The currency floundered back past S$1.8200 Tuesday as the
U.S. dollar strengthened against the euro and yen ahead of the
anticipated Fed rate cut, dealers said.

The U.S. dollar was at S$1.8233, higher than S$1.8185 late
Monday. The Singapore dollar rallied to as high as S$1.8112
Monday.

On the Philippine Dealing System, the dollar closed at 51.965
pesos, slightly higher than 51.920 pesos Monday.

Bank of America said in a research note that the peso was
stuck in a tight range "with most players reluctant to extend
their long (dollar) positions ahead of an expected seasonal
remittance inflows" from Filippinos working overseas.

The Thai currency was steady at 44.670 baht per dollar. It
traded at 44.680 baht late Monday.