Asian currencies mostly down, rupiah slightly firmer

Asian currencies mostly down, rupiah slightly firmer

SINGAPORE (Dow Jones): Most Asian currencies sagged late
Thursday, with the South Korean won extending its recent
inexorable decline as the market grew immune to the central
bank's hackneyed verbal mediation, dealers said.

The New Taiwan dollar also lost some ground, falling for the
ninth consecutive session to a fresh 19-month low.

In Southeast Asia, the Philippine peso and the Thai baht were
weaker, while the Singapore dollar and the Indonesian rupiah were
slightly firmer.

The rupiah ended slightly stronger in Asian trade Thursday as
participants unloaded long-dollar positions.

Traders said the market was squaring positions despite
continued concerns over the resignation last week of Bank
Indonesia's senior governors, amid political wrangling over the
central bank's status.

The dollar traded in a narrow range Thursday and closed at Rp
9,420 in Asia, down from Rp 9,450 at Wednesday's close.

"The market was caught long, so we saw some participants
unloading their positions," said a foreign bank trader.

However, investors remain cautious over Bank Indonesia's
policy after the resignation of acting Governor Anwar Nasution
and four other governors, he said.

Thanks to the rupiah, the Singapore dollar was firmer at
S$1.7548 against its U.S. counterpart, compared with S$1.7564
late Wednesday.

Analysts said the South Korean won and the New Taiwan dollar
will continue to be undermined by the cloudy outlook for the
semiconductor sector, which their economies depend on, and easing
demand from the U.S., which is slowing the pace of these
countries' exports.

And as they compete for shrinking demand for their exports,
both currencies will also weaken in sync with the Japanese yen.
The yen is widely expected to languish against the dollar, after
Japan's political disarray drove it through the key Y110 support,
analysts added.

Domestically, political uncertainties in Taipei and hiccups in
South Korea's restructuring efforts will drive away foreign
investors, who have already turned skittish toward emerging
markets in recent months, said Lo.

Leading the descent, the won lost 1.4 percent to hit its
lowest level in more than a year due to local and offshore dollar
demand, despite market rumors of central bank intervention, which
subsequently appeared unfounded, and the trite verbal mediation,
dealers said.

The dollar finished at 1,193 won, its highest close since Nov.
2, 1999, when it ended at 1,193.30 won. The dollar closed
Wednesday at 1,176.90 won.

Against the New Taiwan dollar, the U.S. currency closed at a
new 19-month high of NT$32.931, up from NT$32.870 Wednesday, as
foreign equity funds spooked by domestic political uncertainties
and a slowing economy flowed out Taipei.

Reversing from its recent gains, the Philippine peso retreated
Thursday on expectations that the central bank will cut its
policy rates as early as Friday, during its board meeting,
dealers said.

The dollar closed at 49.380 pesos on the Philippine Dealing
System, up from Wednesday's close of 49.120 pesos.

After rebounding sharply in New York trading hours Wednesday,
the Thai baht lost ground as tight liquidity in the forward
market eased, dealers said.

Around 0915 GMT, the dollar was at 43.855 baht, up from the
overnight low of 43.35 baht Thursday.

Higher offshore swap premiums, which raises short-term funding
costs, had recently prompted offshore players to cover their
short baht positions, fueling the currency's gains.

Thai central bank Governor Chatu Mongol Sonakul said Thursday
Bank of Thailand reserves the right to intervene in the market,
but will do so as little as possible, implying that the central
bank will likely tolerate the baht's current levels.