Asian currencies down in late trading

Asian currencies down in late trading

SINGAPORE (Dow Jones): Most Asian currencies drifted lower
late Thursday, relinquishing their earlier gains as relief over
signs the U.S. Federal Reserve could pursue a less aggressive
monetary policy faded away, dealers said.

U.S. consumer price index data unveiled overnight added to
recent evidence the U.S. Federal Reserve could wait until August
before raising interest rates again.

Consumer prices rose just 0.1 percent in May after being
unchanged in April. When the volatile food and energy components
are removed, consumer prices advanced 0.2 percent.

There wasn't much either to inspire Asian currencies on the
domestic front.

Even the South Korean won shrugged off a landmark agreement
between the two Koreas aimed at easing tensions and boosting
economic ties.

Instead, the won was eroded by a 5.9 percent plunge in the
local stock market, dealers said. Institutional investors had
bailed out of their positions following their recent buying spree
on the local bourse, dealers said.

After remaining stuck within a narrow 1.1 won band in listless
trading, the dollar finished at 1,115 won, up from Wednesday's
close of 1,114.20 won.

Iris Teo, an analyst at Standard & Poor's MMS International,
said that unless the agreement results in something more
concrete, "the won will be stuck in range-bound trade." She added
that the dollar will likely remain sandwiched between 1,110 won
and 1,120 won over the coming week.

Some dealers also attributed the won's weakness to "hasty"
concerns that increased economic aid to North Korea or
reunification, albeit a remote prospect at the moment, could
prove a heavy fiscal burden for the South. Analysts, however,
said South Korea should benefit from the reduced military threat
from the north and this could bode well for its credit ratings.

In offshore trading, the rupiah broke the Rp 8,500 resistance
against the dollar earlier in the day on higher domestic rates
and expectations an upgrade in Indonesia's sovereign long-term
foreign currency rating could be imminent.

Standard & Poor's Corp. is expected to upgrade Indonesia's
sovereign long-term foreign currency rating to either CCC or B
from "selective default," once the country reaches its final
agreement on restructuring commercial sovereign debt via the
London Club of commercial creditors.

At 0840 GMT, the dollar was at Rp 8,540, up from Rp 8,510 late
Wednesday. The dollar had fallen to as low as Rp 8,478 in early
trading.

In Thailand, the dollar rose to 39.005 baht, from 38.960 baht
late Wednesday on commercial demand for dollars, dealers said.

The Philippine peso closed lower against the dollar in thin
trading Thursday, weighed by the Thai baht and as banks held on
to long U.S. dollar positions, dealers said.

The dollar closed at 42.535 pesos on the Philippine Dealing
System, up from Wednesday's close at 42.420 pesos.

The New Taiwan dollar slipped against its U.S. counterpart
amid equity fund outflows and U.S. dollar-buying by importers,
analysts said.

Also pressuring the local dollar was continued dollar-buying
by some state-owned enterprises to pay their overseas vendors and
suppliers before the end of the second quarter, analysts said.

The U.S. dollar traded at NT$30.828, up from NT$30.815 at
Wednesday's close.

Bucking the region's weakness, the Singapore dollar edged
higher, buoyed by strong commercial demand at just below the
S$1.7200 level against the U.S. currency, dealers said.

Technical traders were, however, keen to sell the U.S. dollar
around S$1.7220 to S$1.7240, capping its ascent, dealers said,
adding that the dollar will likely continue to hover around
S$1.7180 to S$1.7230 in the short term.