Asian currencies mixed in muted trading

Asian currencies mixed in muted trading

SINGAPORE (Dow Jones): Asian currencies were mixed in muted trading Wednesday. With markets in Japan closed for the Golden Week holiday, activity was influenced mostly by local and technical factors.

Most currencies were range bound, except for the Indonesian rupiah, which got a lift after Indonesian officials said they were on the verge of signing a new agreement with the International Monetary Fund (IMF). The letter of intent would clear the way for the release of a US$400 million loan tranche tied to the implementation of reforms sought by the IMF.

A meeting between Indonesian authorities and a visiting IMF team should all but seal the deal, officials said Wednesday afternoon.

The dollar was quoted at Rp 7,950 rupiah near the end of trading Wednesday, down from Rp 8,045 late Tuesday. However, it is unlikely the rupiah will rally much more in the near term as the economic and political outlook for Indonesia is less than certain, a trader at a foreign bank said.

"Corporate interests should come back in below the 7,950 level and start buying dollars again," he said.

The New Taiwan dollar slipped following a drop in local share prices. The Weighted Index of the Taiwan Stock Exchange fell 2.5 percent as Wall Street losses further damped already weak sentiment locally.

Declines in the New Taiwan dollar were limited, however, after the central bank sold about $150 million to support the local currency.

By the close of dealing, the U.S. dollar was quoted at NT$30.699, up from NT$30.675 late Tuesday.

The Singapore dollar edged lower as pressure continued to build from an expected interest rate hike in the U.S. later this month. But trading was light, with the currencies trading in a range between S$1.7160 and S$1.7190.

U.S. dollar-buying by a local bank drove the currency to an intraday high of S$1.7190 early in the session. The Singapore currency rebounded on profit-taking, a dealer at a foreign bank said, driving the U.S. dollar down to S$1.7160. The U.S. dollar then resumed its upward trend to finish the day at S$1.7186, up from S$1.7165 late Tuesday.

The Thai baht hit a 4-1/2-month-low of 38.455 baht to the dollar early in the day as foreign investors bought U.S. dollars to cover short positions. But the "bargain price" perked up buying interest, dealers said, and the currency edged back up to finish the day just shy of where it started.

At the close the dollar was quoted at 38.385 baht, compared with 38.380 baht the previous day.

The South Korean won was unchanged as modest dollar-selling by local exporters was offset by foreign banks covering short-dollar positions late in the session. The dollar closed at 1,110.0 won, unchanged from Tuesday.

The Philippine peso edged higher on a steady dollar inflow and profit-taking by some banks, traders said.

The dollar closed at 41.270 pesos on the Philippine Dealing System, down from Tuesday's close of 41.279 pesos.

Volume was a thin $84.37 million Wednesday compared with $127.9 million Tuesday.