Asian currencies fall late, market awaits data

Asian currencies fall late, market awaits data

Nirmala Menon, Dow Jones, Kuala Lumpur

Most Asian currencies fell late Monday as the U.S. dollar firmed
against the yen on short-term position adjustments, but trading
was dulled by a U.K. bank holiday and the upcoming long Labor Day
weekend in the U.S.

Market players also kept to the sidelines ahead of the issue
of several key economic indicators out of the U.S. and Japan this
week, as well as U.S. Federal Reserve Chairman Alan Greenspan's
speech at an economic symposium Friday.

"People are not taking positions. There's hardly a sound in
the market. The market is dead," declared a regional currency
dealer at a Singapore-based Asian bank.

The health of the U.S. economy remains the key factor
underpinning near term market sentiment, with players largely
neutral to economic indicators from individual Asian countries.

So far, data from the U.S. has sent mixed signals, and until
there's some clarity, Asian currencies will likely remain locked
in range-bound trading, market participants said.

"The market is very uncertain (on) what's the direction going
forward. Most of the dollar/regionals are going to be trapped in
range. The upside is limited, so is the downside unless there are
clearer prospects (about the U.S. economy)," said Jimmy Koh, head
of treasury research at Singapore's United Overseas Bank.

To that end, Greenspan's remarks on the economy Friday will be
closely watched, Koh said.

This will be Greenspan's first public appearance after the
Aug. 13 Federal Open Market Committee meeting where the Fed opted
to keep interest rates unchanged.

Asian currencies mostly ignored Hong Kong Executive Council
member James Tien's comments on the Hong Kong dollar's peg to the
U.S. currency.

Tien Sunday said the abolition of the exchange rate system
wouldn't have a significant impact overall.

His remarks came as talk about a change to the peg resurfaced
in the market.

But "people are immune to it (the talk)," said an Asian bank
dealer in Singapore, who noted that such rumors pop up
occasionally in the market.

The New Taiwan dollar ended at its lowest level in nearly
three months as offshore players vigorously covered their short
positions on the U.S. dollar.

The U.S. dollar closed at NT$34.245 - its highest since May 28
- from NT$34.139 Friday.

The dollar firmed for the third consecutive session against
the South Korean won, which moved in tandem with the Japanese
currency.

The dollar ended at 1,205.3 won, up from 1,202.6 won Friday,
after moving between 1,197.5 won and 1,205.8 won intraday.

The U.S. dollar also firmed against the Indonesian rupiah in
line with the regional trend, and also real corporate and
importer demand, but its rise was capped as the central bank
actively sold the U.S. currency, dealers said.

The dollar rose as high as Rp 8,975 in intraday trading but
pulled back after central bank intervention. The dollar was
quoted at Rp 8,935 late in Asia, from Rp 8,890 Friday.

The U.S. dollar edged up against its Singapore counterpart as
the weaker yen sparked modest buying of the U.S. unit in a thin
market.

Late in Asia, the U.S. dollar was quoted at S$1.7586, from
S$1.7566 late Friday.

Offshore dollar buying helped the U.S. currency edge up
against the Thai baht, although the local unit recovered some
ground late in Asia.

News that the Thai government may repay loans borrowed under
an expired International Monetary Fund rescue fund by January, a
year ahead of schedule, didn't affect the market, dealers said.

Thailand owes about US$1 billion directly to the IMF, and
about $6 billion to other donors in the rescue program.

Analysts said early repayment would be positive for sentiment
as it would ensure the debt is eliminated while foreign reserves
are high.

Late in Asia, the dollar was quoted at 42.296 baht, compared
with 42.335 bath Friday.

Dollar selling by exporters helped the Philippine peso erase
early losses and gain ground against the U.S. unit for the first
time after seven straight sessions of losses.

The U.S. currency fell back from a high of 52.410 pesos to end
at its intraday low of 52.230, pesos down from 52.365 pesos
Friday.