Asian currencies mixed, rupiah closes higher

Asian currencies mixed, rupiah closes higher

SINGAPORE (Dow Jones): Asian currencies were mixed late
Wednesday, as the market displayed a non-committal reaction to
the close finish of the U.S. presidential election, dealers said.

While Asian currencies had barely reacted to earlier reports
Republican presidential candidate George W. Bush had likely
defeated Democrat candidate Al Gore, it is now unclear whether
Bush has actually won the election. Gore's campaign manager has
sought a recount of the results in Florida, with Gore refusing to
admit defeat.

Most analysts said they don't expect any significant shift in
U.S. trade or foreign policy even under a Republican
administration, which would therefore have minimal impact on
Asian currencies in the medium term.

"Essentially, we see no change in U.S. trade or foreign policy
resulting from a change in administration and therefore we see
very little medium-term impact on Asian currencies resulting from
a Bush or Gore victory," said Peter Redward, a regional currency
strategist at Deutsche Bank.

Longer term, however, the risk for Asian currencies could come
from the way the new administration links trade relations to
labor issues and environmental standards, analysts said.

Taking center stage in Asia, President Joseph Estrada's
defiance in the face of mounting pressure for him to step down
continued to weigh on the Philippine currency, which slumped
below 50 pesos against the dollar.

Most other Asian currencies were wedged in tight ranges as the
close U.S. presidential race kept market participants on the
defensive.

The Indonesian rupiah closed higher Wednesday on dollar sales
by state banks, as the market shrugged off the confusion over the
winner of the U.S. presidential race.

Early predictions of a win by Republican candidate George W.
Bush failed to lift the dollar against the rupiah, with most
market participants preferring to focus on local political
developments.

Late in the Asian day, U.S. electoral officials still hadn't
named a winner of the election.

With little impact from the U.S. elections, the dollar closed
lower at Rp 9,195 in Asia, from Rp 9,255 late Tuesday.

News Indonesia is still mulling plans to force local exporters
to convert their dollar receipts back into the local currency
also helped the rupiah.

Although Trade and Industry Minister Luhut Panjaitan said
Wednesday the government is still far from a decision, his
comments will refresh talk of forced repatriation of dollars in
the foreign currency markets.

Still, instability on the local political front, notably a
higher court's decision to reopen former President Suharto's
corruption trial, continued to weigh on the rupiah.

The peso extended Tuesday's decline, after hopes of an early
and voluntary exit by President Estrada receded.

Estrada has denied accusations he took bribes from gambling
lords and has vowed to clear his name. A possible impeachment
trial in the senate could start later this month.

Gerard Teo, an economist at ABN AMRO, said that a conference
call with central bank governor Raphael Buenaventura suggested
the authorities believe the political quandary will be resolved
constitutionally and that this could take place by year-end.

This could spark a "relief rally" in Philippine asset markets,
he added.

He said that ABN AMRO may adjust its end-2001 forecast of 55
pesos if the country's "risk premium eases with a successful
political resolution", although it is maintaining this forecast
for now. The bank expects the dollar to trade at 50 pesos at the
end of this year.

The dollar closed at 50.100 pesos on the Philippine Dealing
System, up from Tuesday's close of 49.250 pesos. The dollar hit
an intraday high of 50.480 pesos.

In the Thai currency market, the dollar eased to 43.57 baht
from 43.625 baht late Tuesday.

A surge on Nasdaq futures sparked by earlier reports of a Bush
victory salvaged the South Korean won, which was hit by worries
over restructuring efforts at Hyundai Engineering & Construction
Co. and Daewoo Motor Co, dealers said.

The dollar finished at 1,134.30 won, down from Tuesday's close
of 1,136.10 won.

The New Taiwan dollar continued to be boosted by foreign
equity fund inflows, lured by the country's higher weighting in
the widely tracked Morgan Stanley Capital International Indexes.

The U.S. dollar closed at NT$32.119, down from NT$32.149
Tuesday.