Asian currencies down prior to Greenspan report, U.S. retail data

Asian currencies down prior to Greenspan report, U.S. retail data

SINGAPORE (Dow Jones): Most Asian currencies drifted lower late Monday in cautious, range-bound trading, as the yen provided a weak lead with Japanese financial markets closed for a national holiday, dealers said.

The Indonesian rupiah closed slightly lower in thin trading Monday, on demand for the dollar from local companies, dealers said.

The rupiah, however, rebounded from its intraday low of Rp 9,620 as a state bank, believed to be acting on behalf of Bank Indonesia, sold the dollar.

The dollar closed at Rp 9,615, up slightly from Rp 9,600 Friday.

Dealers said local companies purchased the dollar to pay offshore liabilities.

While domestic political uncertainties continue to affect the rupiah, dealers said that wasn't the major force that dragged the local unit lower Monday.

"The market won't react significantly unless major political developments take place," said a dealer with a foreign bank. "Fortunately, it was quiet today."

Dealers expect the dollar to trade between Rp 9,590 and Rp 9,630 Tuesday.

The South Korean won, the New Taiwan dollar, the Singapore dollar, the Thai baht and the rupiah - which was hurt by Indonesia's political problems rather than external factors - were slightly weaker. Resisting the pressure from its regional peers, the Philippine peso was higher.

The South Korean currency ended at 1,264.30 won against the dollar, after recovering from its intraday low of 1,268.00 won as the stock market rose. However, the won remained weaker than Friday's closing level of 1,261.60 won.

The New Taiwan dollar ended at NT$32.318 against its U.S. counterpart, lower than Friday's close of NT$32.282, but a tad firmer than Monday's intraday low of NT32.330.

Overall, foreign exchange dealers were largely noncommittal ahead of U.S. Federal Reserve Chairman Alan Greenspan's semiannual testimony to Congress and U.S. January retail sales data due Tuesday. The market will be looking out for clues on the depth of the U.S. economic slowdown and how aggressive a likely interest rate cut would be during the Fed's next policy-setting meeting March 20.

Unless the Japanese yen breaks out of its recent trading range, Asian currencies will likely remain trapped within familiar trading bands for the rest of the week, market watchers said.

"I don't think there's much excitement to get the currencies out of the range," said Thio Chin Loo, a currency strategist at BNP Paribas Group.

In Asian trading hours, the Japanese yen floundered to as low as Y117.95 against the dollar in thin trading. At 0855 GMT, the dollar was quoted at Y117.65, above Y117.55 late Friday in New York and Y116.50 late Friday in Tokyo. The Japanese central bank surprised markets Friday by trimming its discount rate to 0.35 percent from 0.5 percent, a symbolic move expected to do little to stimulate the country's economy.

The Singapore dollar edged lower to S$1.7473 against the U.S. currency, from S$1.7470 late Friday.

Fears that the Monetary Authority of Singapore might defend the local currency around S$1.7500 continued to keep a rein on its losses, dealers said. Analysts expect the Singapore dollar to remain wedged between S$1.7400 and S$1.7500 this week.

Influenced by the regional currency weakness and nervousness ahead of the imminent announcement of Thailand's cabinet lineup, the Thai currency weakened to 42.650 baht to the dollar, from 42.585 baht late Friday.

Equity fund inflows helped support the Philippine currency, which closed at 47.820 pesos, from 48.200 pesos Friday. The peso largely shrugged off the expected cut in the central bank's overnight rates, effective Monday.