Asian currencies down late, U.S. stock gains boost dollar

Asian currencies down late, U.S. stock gains boost dollar

Alan Yonan Jr., Dow Jones, Singapore

The U.S. dollar firmed slightly against most Asian currencies
Thursday, helped by a rare gain in U.S. stock prices and concerns
that Japanese monetary authorities might take action to prop up
the dollar against the yen.

The only regional currency to trump the dollar was the
Indonesian rupiah, which rallied on the prospects of capital
inflows from the government's sale of distressed assets left over
from the 1997-98 Asian financial crisis.

The Dow Jones Industrial Average closed higher Wednesday after
falling for seven straight sessions, providing a solid footing
for the dollar heading into the Asian trading day.

In Tokyo, officials from Japan's Ministry of Finance
reiterated Thursday that they were prepared to intervene in
foreign exchange markets to keep the dollar from falling too fast
against the yen.

The "jawboning" helped push the dollar above the 117 yen level
for the first time in three sessions, setting a strong tone for
the U.S. currency against its Asian counterparts.

South Korean government officials continued their efforts to
"talk down" the won, which has appreciated 12 percent against the
dollar since early April. Authorities in South Korea, Japan and
Taiwan have all expressed concern that excessive currency
strength is having a negative impact on the competitiveness of
their exports in global markets.

The Bank of Korea released a statement saying it is "clearly
aware of the necessity of stabilizing the foreign exchange
market," suggesting that it would step into the market to slow
the dollar's decline against the won if warranted.

The BOK, using state-run banks as agents, bought small amounts
of the U.S. currency Thursday, dealers said. The state-run banks
have intervened on a number of occasions in recent weeks, buying
as much as US$500 million per session.

The dollar closed at 1,174.8 won, up from 1,171.8 won on
Tuesday. The won wasn't traded Wednesday because markets in Seoul
were closed for a public holiday.

The New Taiwan dollar fell for the first time in four sessions
as the yen's slide encouraged interbank traders to cover their
short U.S. dollar positions.

The U.S. dollar closed at NT$33.040, up from NT$32.999
Wednesday.

Exporters continued to sell the U.S. dollar, but they did so
cautiously following the central bank's intervention to support
the U.S. currency a day earlier.

Dealers said the Taiwan central bank bought about $200 million
Wednesday in the open market and a much smaller amount Thursday.

Against the Singapore dollar, the U.S. dollar was quoted at
S$1.7423 late Thursday, up from S$1.7390 late Wednesday.

The currency pair traded in a fairly narrow range for most of
the session, with corporate U.S. dollar selling putting pressure
on the currency.

The U.S. dollar pushed higher against the Singapore dollar and
other Asian currencies late in the session following its gains
against the yen.

The U.S. dollar broke resistance at S$1.7420 and touched an
intraday high of S$1.7430 as European-based market participants
entered the fray, buying to cover their short positions in the
U.S. dollar.

Trading in the peso was fairly quiet as market players tried
to gauge what the makeup of Congress will be when the legislative
body resumes sessions Monday.

The focus is on whether administration-allied Senators will be
able to retake majority control of the Upper House when the
sessions resume and ensure the smooth passage of key economic
bills.

The dollar closed at 50.380 pesos on the Philippine Dealing
System, up a touch from 50.360 pesos Wednesday. Volume fell to
$77.75 million from $147.5 million Wednesday.

The rupiah was buoyed by an inflow of foreign funds to pay for
the government's sale of its $125 million stake in PT
Telekomunikasi Indonesia.

The Indonesian Bank Restructuring Agency's sale next week of
Rp 145 trillion in loans is also helping sentiment toward the
local currency.

Late in Asia the dollar was quoted at Rp 8,885, down from Rp
8,995 late Wednesday.

Against the baht, the dollar was quoted at 40.585 baht, up
from 40.500 baht late Wednesday. It was the dollar's second
straight rise against the baht after hitting a two-year low
earlier in the week.

Thai exporters are particularly concerned about excessive
volatility in the exchange rate and would prefer the baht to
stabilize within a range of 40.00 baht-41.00 baht to the dollar,
Deputy Commerce Minister Suvarn Valaisathien said Thursday after
meeting with central bank Governor Pridiyathorn Devakula.