Asian currencies drift sideways against greenback

Asian currencies drift sideways against greenback

HONG KONG (Dow Jones): Asian regional foreign exchange markets
enjoyed a day of relative calm Wednesday, as most local
currencies traded sideways against the U.S. dollar.

With Tokyo-based market participants on holiday, dealers in
other Asian financial centers were content to sit back and watch
the markets drift after the volatility of recent days.

The rupiah, the focus of attention for the past week, softened
only slightly against the U.S. dollar even though sentiment
toward Indonesian markets remained dismal.

Given the highly illiquid conditions in the currency market,
most traders were unwilling to establish new positions.

The risk of seeing their capital wiped out by volatile moves
in the rupiah triggered by unforeseen developments in the East
Timor crisis or the Bank Bali scandal was far too great compared
with the potential rewards, they said.

As a result, the rupiah remained broadly range-bound, with the
U.S. dollar trading in a Rp 7,900 to Rp 8,200 band, despite the 3
percent slide in the Jakarta stock market.

Toward the end of Asian interbank trading, the U.S. currency
was quoted at Rp 8,050, compared with Rp 7,950 late the previous
day.

Among other Southeast Asian currencies, the baht strengthened
moderately against the U.S. dollar, although dealers said the
Thai currency too was trading in a range.

Late in Asian dealing the U.S. dollar was quoted at 39.4250
baht, down from 39.5250 baht late the day before.

With dollar buying interest emerging at 39.40 baht, and
hedgers poised to sell on any rally above 39.60 baht, the
currency is unlikely to breach those borders in the near future,
barring any new swings in the rupiah, said dealers.

In contrast, the Philippine peso weakened slightly. With no
fresh directional impulses, however, trading was subdued. At
$189.20 million, volumes on the Philippine Dealing System were
down sharply from $314.90 traded Tuesday.

At the local close, the U.S. dollar was quoted against the
peso at 39.935 pesos, up from 39.900 pesos the previous day.

Against the Singapore dollar, the U.S. currency ended Asian
interbank trading at S$1.6887, up marginally from S$1.6878 the
day before.

As long as the boost given to the Singapore currency by the
strength of the yen is canceled by the negative impact of events
in Indonesia, the U.S. dollar is likely to remain range-bound
between S$1.6850 and S$1.6950, said traders.

In other markets, the Korean won eased fractionally, with the
U.S. dollar inching higher to close at 1,193 won, up from
1,192.30 won.

The New Taiwan dollar further extended its recent gains, with
the U.S. currency dropping to end the session at NT$31.755, down
from NT$31.765.