Asian currencies down, rupiah leads fall

Asian currencies down, rupiah leads fall

Irene Kwek, Dow Jones, Singapore

SINGAPORE (Dow Jones): Most Asian currencies were lower Monday, with the rupiah diving amid concerns that a series of air strikes against military installations in Afghanistan could spark further anti-U.S. protests in Indonesia, the world's most populous Muslim nation.

Elsewhere in the region, the reaction in foreign exchange markets was somewhat subdued, as a holiday in Tokyo sapped volume. Bucking the trend, the New Taiwan dollar and the South Korean won ended slightly higher as local players reduced their positions in the U.S. currency.

Fears that the conflict could escalate prompted a wave of safe-haven flows into the Swiss franc Monday - and a flight out of currencies seen most vulnerable to heightened tension, such as the rupiah.

The U.S. currency finished higher against the Singapore dollar, rising to S$1.7939 from S$1.7838 late Friday. The dollar rose as high as S$1.7960, a two-month high, before drifting back down.

In the next few sessions, the U.S. currency will likely be supported at S$1.7880 and face key resistance at S$1.8000, traders said.

In the Philippines, the peso closed slightly lower in range- bound trade, with the dollar closing at its intraday high of 51.600 pesos, compared with 51.565 pesos Friday.

After the close of trading, the central bank governor, Rafael Buenaventura, denied rumors in the market that the bank had intervened in support of the peso. Buenaventura also expressed hope that the peso wouldn't be hurt by news of several bombings in the southern part of the country early Monday.

In Bangkok, the dollar was at 44.800 baht late Monday, up from 44.705 baht, buoyed by its gains against other regional currencies. Traders said resistance was pegged at 44.850 baht.

The New Taiwan dollar ended slightly higher at NT$34.557 to the dollar, compared with NT$34.559, in light trade, as many players retreated to the sidelines due to increased uncertainty.

In contrast to Indonesia, the Taiwanese central bank had to intervene Monday to prevent the local currency from strengthening too quickly, purchasing around US$100 million in exchange for New Taiwan dollars, traders said.

Meantime, the South Korean won finished slightly stronger, as the dollar dipped to 1,311.6 won from 1,312.2 won.