Asian currencies up late

Asian currencies up late

Netty Ismail, Dow Jones, Singapore

Asian currencies remained caught in their updraft late Thursday, as the U.S. dollar continued to struggle in international foreign exchange markets.

The dollar - which has been tottering of late - received another blow after Federal Reserve Chairman Alan Greenspan warned of continued uncertainty over the strength of the U.S. economic recovery, signaling it is likely to be several months before the central bank raises rates from their current 40-year lows.

With inflation pressures low, the Fed "should have ample opportunity to adjust policy to keep inflation pressures contained once sustained, solid, economic expansion is in view," Greenspan said.

Most observers now rule out a rate hike when the Fed meets May 7 and even during its next meeting in late June, instead betting on their August meeting as the starting point for reversing some of last year's 11 rate cuts.

At 0900 GMT (4 p.m. Jakarta time), the dollar was quoted at 130.50 yen, below 130.73 yen late Wednesday in New York and down from 131.11 yen late Wednesday in Tokyo.

With the seemingly meek attempt by Japanese authorities to talk up the dollar against the yen, the U.S. currency is expected to spiral even lower toward 128 yen, said Ron Leven, a Tokyo- based strategist at Lehman Brothers.

This will likely fuel further gains in other Asian currencies in the near term, with the South Korean won and the Singapore dollar expected to continue leading the advance, he added.

The won closed at its strongest level in almost three months against the dollar, as foreign investors continued to snap up South Korean shares for a second day in a row and as the yen gained ground.

The dollar closed at 1,313.2 won, down from 1,318.7 won Wednesday.

Foreign investors were net buyers of 185.8 billion won worth of shares Thursday, helping to lift Seoul's benchmark stock index by 0.8 percent to a 26-month closing high of 937.61.

The Singapore dollar strengthened to as high as S$1.8235 against its U.S. counterpart in intraday trade, before retreating to S$1.8257 at 0925 GMT (4.25 p.m. Jakarta time). Still, the Singapore dollar was stronger than late Wednesday's level of S$1.8288 to the U.S. dollar.

Foreign equity inflows and the stronger yen helped prop up the New Taiwan dollar to its highest close in four months.

The New Taiwan dollar ended at NT$34.940 against the U.S. currency, compared with NT$34.963 Wednesday.

Foreign institutional investors bought a net NT$10.1 billion worth of shares on the Taiwan Stock Exchange Thursday, the exchange said.

The Thai currency was slightly stronger at 43.310 baht to the U.S. dollar, compared with its opening level of 43.340 baht. Wednesday, the dollar traded between 43.320-43.360 baht.

Remarks by the central bank Wednesday that it hadn't intervened to curb the baht's recent strength emboldened participants to push the currency higher, dealers said.

"If the central bank had kept quiet, the baht wouldn't be this strong," said a dealer at an Asian bank.

Still, some dealers doubted the veracity of the central bank's remarks, as the Bank of Thailand was spotted buying dollars recently - even on Wednesday, when the denial was made.

Bolstered by its regional peers, the Philippine currency strengthened to 50.940 pesos to the U.S. dollar, compared with 51.005 pesos Wednesday.

The Indonesian currency climbed to Rp 9,390 to the U.S. dollar, from Rp 9,425 late Wednesday.