Asian currencies lower on U.S. rate fears

Asian currencies lower on U.S. rate fears

HONG KONG (Dow Jones): Ruffled by hawkish commentary from the
U.S. Federal Reserve chief, and edgy as investors dump yen, Asian
currencies are weaker Friday.

Indonesian government officials offered up some soothing words
to shore up confidence in the rupiah, and dealers say most other
currencies have stabilized around current levels. But many add
it'll be a few days before the bad mood lifts.

"So long as (the U.S. dollar) holds under Y111.00 the Asian
regionals should stabilize," said Rebecca Patterson, global
currency strategist with J.P. Morgan in Singapore.

The dollar is trading around 110.78 yen, from Y110.64 in New
York late Thursday. Sellers were more active last session after
the news that Moody's Investors Services Inc. is mulling another
downgrade for Japan. Some traders say the U.S. unit is headed for
Y112.00.

And that's helped unsettle regional currencies already left
shaky by a mess of domestic concerns and rate worries.

Federal Reserve Chairman Alan Greenspan figured most
prominently in the day's losses, said traders. Analysts inferred
from his semi-annual Humphrey Hawkins address that another 75
basis points in rate tightening is due this year. Many market
traders had looked for just 50 basis points more.

The U.S. dollar is up to 38.03 against the Thai baht, from
37.72 baht late Thursday. A dealer with a U.S. bank said the unit
broke through a previous high at 37.85 baht, "but it remains
unclear whether this is a false break, or not."

Against the Indonesian rupiah, meanwhile, the U.S. dollar is
trading at Rp 7,439, up from Rp 7,415 late in the previous
session. The currency is undermined by lingering political
concerns around the dismissal of General Wiranto from cabinet,
and losses in the stock market.

Indonesian senior economics minister Kwik Kian Gie said Friday
that he remains confident the rupiah can strengthen to between Rp
6,000 to Rp 7,000 to the dollar.

And many analysts say Rp 7,500 is a good level to start
selling U.S. dollars.

Morgan's Patterson also faults a deterioration in regional
risk appetite for the woes in the currency markets this week.
Rising foreign exchange volatility - in part as year-2000
liquidity is taken back - growing fears about the Fed, widening
swap spreads and wider emerging market bond spreads are just some
of the factors cutting into confidence, she said.

The U.S. dollar is also higher against the Korean won, trading
at 1129.10, from 1,128.70 late Thursday, but off the sessions
highs.

Against the Singapore currency, the U.S. dollar is quoted at
S$1.7047, compared with S$1.7063 earlier, and unchanged from late
Thursday.

It is trading at 40.66 against the peso, up from PHP40.573
late in the previous session.

Taiwan's dollar is now little changed against the U.S. unit,
with the U.S. dollar trading at NT$30.715, from NT$30.711.