Asian currencies stronger as local issues take center stage

Asian currencies stronger as local issues take center stage

SINGAPORE (Dow Jones): Asian currencies are stronger against the U.S. dollar in choppy trading late Wednesday, as salient domestic issues take center stage in currency markets across the region.

There was some early session liquidation of long U.S. dollar positions following the U.S. Federal Open Market Committee's decision to leave U.S. rates unchanged. But U.S. dollar strength was a non-factor as it gradually drifted higher against the yen during the session, traders said.

In late trading, the U.S. dollar was trading at 107.13 yen, up from 06.61 yen in late Asian trading Tuesday.

Instead, the Thai baht remained relatively strong, following the Bank of Thailand's decision Tuesday to strictly adhere to a cap on offshore baht lending.

The South Korean won also stayed firm against the U.S. dollar, after government comments Wednesday that there would be no further stock price manipulation and tax evasion probes into Hyundai Group.

The Indonesian rupiah moved sideways during the session, as the presidential election process continued to run smoothly, following the election of Akbar Tandjung as parliamentary speaker late Tuesday.

The U.S. dollar was also trading at Rp 7,740, down from Rp 7,780 late Tuesday. Traders said there is little incentive to sell U.S. dollars in such a thin, volatile market. They remain convinced that the U.S. dollar will trade between Rp 7,500 and Rp 8,000 as long as the presidential election process proceeds smoothly and peacefully.

Although the Singapore dollar and Philippine peso lost some of their overnight and early Asian gains against the U.S. dollar, the two currencies remained well bid throughout the session, mirroring the relative strengths of the Thai baht and Indonesian rupiah.

The New Taiwan dollar remained flat, despite some intraday volatility.

In late trading, the U.S. dollar was trading at 39.085 baht, well down from 39.785 baht in late Asian trading Tuesday. Traders said the Bank of Thailand's move to tighten existing rules governing baht lending to non-resident parties drove the baht sharply higher.

The U.S. dollar was also trading at 1203.7 won, well down from 1207.8 won in late trading Tuesday.

South Korea's Financial Supervisory Commission Chairman Lee Hun-jai comments Wednesday that there won't be further Hyundai probes for illegal activity buoyed the local equity market, with the index soaring 5.5 percent after the announcement.

The U.S. dollar was also trading at NT$31.785, just up from NT31.78 late Tuesday.

In Southeast Asia, the U.S. dollar was trading at S$1.6764, well down from S$1.6887 late Tuesday. Traders said government's repeated statement that the Monetary Authority of Singapore will not resort to a weak exchange rate policy to underpin regional and global competitiveness has buoyed the domestic currency.

On the Philippine dealing system, the U.S. dollar was trading at 39.99 pesos, down from 40.265 pesos late Tuesday.