Asian currencies mixed late on obscure regional outlook

Asian currencies mixed late on obscure regional outlook

HONG KONG (Dow Jones): Asian currencies had a mixed day Monday
as a weakening Japanese yen further clouded an already uncertain
regional outlook.

The arrival of international peacekeepers in East Timor failed
to relieve the pressure on the Indonesian rupiah, which ended
lower as skeptical market players waited to gauge the reaction of
the Indonesian military and local militias to the Australian-led
deployment.

The Thai baht, however, strengthened, boosted by buying
related to anticipated foreign investment, despite the release of
disappointing economic growth figures for the second quarter.

The same investment flow weighed on the Singapore dollar, as
Singapore's United Overseas Bank was seen selling the local
currency for baht ahead of its expected acquisition of a stake in
Thailand's Radansin Bank.

Elsewhere, the Philippine peso inched higher in parallel with
the baht, even though plentiful domestic liquidity allowed the
local authorities to steer short-term interest rates lower.

In North Asia, the South Korean won regained some of the
ground lost in Friday's sell-off. The New Taiwan dollar ended
marginally lower, weighed down by the yen.

The deployment of international peacekeeping forces to East
Timor early Monday did little to burnish Indonesia's tarnished
image in the eyes of investors.

Traders said that participants were holding back from the
market, waiting to see how local units of the Indonesian military
and integrationist militias respond to the Australian-led force.

Even if the peacekeeping mission is successful, however, the
unresolved banking scandal centered on Bank Bali will continued
to weigh on the rupiah, as Bank Indonesia Deputy Governor Miranda
Gultom acknowledged Monday.

Speaking to reporters on the sidelines of a central bank forum
on the scandal, Miranda admitted that the suspension of
International Monetary Fund and World Bank loans is harming the
country's economy.

"In terms of the amount of money that's supposed to be
released, it's not that much," Miranda said, but "it ruins
investor and market confidence in Indonesia."

The extent of the damage was apparent late Monday, as the U.S.
dollar crept higher to end local interbank trading at Rp 8,300,
up from Rp 8,177 Friday.

Elsewhere the baht strengthened on what dealers said was
sustained buying of the Thai currency by Singapore's United
Overseas Bank, which is widely believed to be on the point of
announcing the acquisition of a stake in Thailand's Radanasin
Bank.

Although the baht slipped from its intraday high following the
release of data showing the Thai economy grew by a disappointing
3.5 percent in the second quarter compared with a year earlier -
the market had been expecting growth of around 6 percent - the
baht still ended the day higher.

Toward the close of local trading, the U.S. dollar was quoted
against the baht at 39.9850 baht, down from 40.0100 baht Friday.

Selling of Singapore dollars by UOB in the other leg of its
cross-trade against the baht was blamed for dragging the
Singapore dollar lower.

Toward the end of local trading, the U.S. dollar was quoted
against the Singapore currency at S$1.6957, up slightly from
S$1.6937 late Friday.

The Philippine peso edged higher, supported largely by the
strength of the baht, with which the peso shows a high degree of
correlation. At the Manila close, the U.S. dollar was quoted at
40.140 pesos, down from 40.155 pesos Friday.

In North Asia, the Korean won regained some of the ground it
lost Friday, when sales by foreign investors drove it to a one-
month low, as Korean exporters took advantage of the favorable
exchange rate to cash in dollar revenues.

At the close, the U.S. currency was quoted at 1,200.70 won,
down from 1,202.80 won at the end of the previous session.

The New Taiwan dollar closed marginally weaker, tracking the
yen's fall, although dealers said the central bank stepped into
the market to moderate the extent of the local currency's
decline.

At the session's close, the U.S. dollar was quoted at
NT$31.796, up from NT$31.794 at the previous finish.