Asian currencies close weaker

Asian currencies close weaker

SINGAPORE (AFP): Asian currencies closed lower in range-bound
trade on Monday as the yen eased against the US dollar, with the
Philippine peso and Thai baht pulled down by domestic factors,
dealers said.

"The regionals are moving very much sideways," said a dealer
with a European bank. "They've been at these levels most of the
day."

The Singapore dollar fell to 1.6890 from its close Friday of
1.6877 against the American dollar, the Thai baht to 36.92 from
36.71,the South Korean won to 1,175 from 1,170, and the Taiwan
dollar to 32.265 from 32.239.

The Philippine peso fell to 39.30 from 38.675 on domestic
factors.

The dealer said the Philippine central bank was believed to be
buying up dollars to cover maturing bonds, while the Thai baht
was affected by the yen as well as negative comments by rating
agencies on Thailand.

Analysts here have ruled out a pre-Lunar New Year rally in
regional markets as the global financial system is still in
turmoil.

The Lunar New Year falls on February 16 this year. Before Asia
plunged into turmoil with rapid currency declines in mid-1997,
markets had usually been robust in the run-up to the festival,
the main holiday season for many Asian nations.

The yen closed Asian trading here higher around 113.73, from
its opening level of 113.05 and its New York finish last Friday
of 113.30.

Dealers in Tokyo said the dollar, which had fallen on a slump
in Japanese government bonds last week, came back following a
rally in the bond market.

"Investors bought the yen when yields shot up last week, and
now they started selling it amid falling yields," said Noriyoshi
Tsunoda, a chief dealer at Fuji Bank Ltd.

The yield moves inversely to price but higher yields lead
investors to buy the Japanese currency necessary to purchase the
bond.

In London, the euro hit a new low against the dollar early
Monday in London ahead of what were expected to be poor German
industrial output figures, while the dollar regained ground
against the yen.

The euro fell to 1.1228 dollars from 1.1281 dollars late
Friday, the lowest level since its launch in 10 European Union
countries at the start of this year, before recovering to 1.1235
dollars.

Against sterling, the euro fell to 0.6884 pounds (0.6891).
The dollar rose to 113.69 yen from 113.49 yen earlier in Tokyo
and 113.02 yen late Friday in London.

The euro's weakness was prompted by the expectations of poor
German figures, which follow a series of strong U.S. indicators.

"The German industrial production figures should be pointing
to recession," said Robert Hayward, economist at the Bank of
America. "There's a huge contrast between the U.S. and Euroland's
economies."