Asian monies fall as dollar rallies against yen

Asian monies fall as dollar rallies against yen

SINGAPORE (Dow Jones): A bout of position covering pushed
Southeast Asian currencies lower against the U.S. dollar during
Asian trading hours on Monday.

After renewed buying propelled the U.S. dollar above 119 yen
in New York on Friday, dollar buying from market players caught
short the U.S. currency against Asian regional currencies forced
the Singapore dollar and the Thai baht lower in Asian trading. In
North Asia, the new Taiwan dollar and the South Korean won also
fell.

In late trading in Tokyo, the dollar was trading at 119.35-38
yen, up from 119 yen in New York late Friday and 117.99-118.02
yen here Friday afternoon.

The greenback was quoted at 119.57-59 yen three hours
earlier.It moved between 119.08 yen and 119.69 yen during the
day.

The Philippine peso, however, recovered from its early lows to
finish higher on the day, while the rupiah traded sideways ahead
of Tuesday's meeting in Jakarta of the People's Consultative
Committee, Indonesia's highest legislative body.

Even if the U.S. dollar had not strengthened against the yen,
Asian regional currencies would have been likely to weaken,
according to many traders and analysts. Following recent rallies,
Asian currencies are over-valued and overdue for a correction,
they argue.

"The market is very short of dollars," said the head of
foreign exchange at one Japanese bank in Singapore. "In this
environment Asian currencies could weaken even if there is a
setback for the dollar against the yen."

Highest

As interbank trading in Singapore was drawing to a close the
U.S. dollar had risen to an intraday high of S$1.6475, its
highest level in a month and well above S$1.6286 late in Asia on
Friday.

U.S. dollar purchases by importers were instrumental in
pushing the baht lower in Asian trading on Monday.

The baht will continue to find support from inflows into the
market of foreign investors' funds, said Chia Woon Khien,
regional treasury economist at Skandinaviska Enskilda Banken in
Singapore, at least in the medium term.

Late in Asian trading on Monday, the U.S. dollar was quoted at
36.66 baht, up from 36.91 baht late on Friday.

The Philippine peso also started trading on Monday on a weak
note, but recovered from its early intraday lows as overseas
demand for the local currency picked up.

At the close of trading on the Philippine Dealing System, the
U.S. dollar was quoted at 39.83 pesos, down from 39.96 pesos at
the close of trading on Friday.

Late in Asian dealing on Monday, the U.S. dollar was quoted at
Rp 8,500, a touch above Rp 8,374 at the same time on Friday.

In North Asia, both the new Taiwan dollar and the won fell
back in response to the U.S. dollar's rise against the yen.

At the close of domestic trading in Taipei, the U.S. dollar
was quoted at NT$32.647, up from NT$32.558 at Friday's close.

In Seoul the U.S. dollar ended at KRW1,315, up from KRW1,312
on Friday.