Asian monies mixed as weakness persists

Asian monies mixed as weakness persists

HONG KONG (Dow Jones): Asian currencies are mixed in late Wednesday trading as afternoon profit-taking brought some respite from the U.S. dollar's relentless gains.

The Korean won is higher after climbing back from its lows of the session as the stock market in Seoul recovered some of the ground it lost in a downturn earlier in the day. The Indonesian rupiah was also up slightly on the day.

But as Nasdaq jitters continue to unnerve regional bourses, reminding the foreign exchange markets of the great uncertainty building up around the U.S. economy and interest rate hikes, players say more weakness is in store for the Asian currencies.

"Investors don't want to put money in riskier assets," said Rebecca Patterson, Asian market strategist with J.P. Morgan.

Last week's half-point rate hike has got the markets spooked and the tendency for currencies will be lower until some U.S. data come along to suggest less forceful policy at the U.S. Federal Reserve.

On the trading floors, a dealer with a U.S. firm said "the Korean won and the (Philippine) peso have been the leaders this session."

He said some profit takers emerged in the afternoon session as it got expensive to hold such long U.S. dollar positions against the South Korean currency. It was trading at 1132.6 won late, down from 1134.40 won late Tuesday and a high over 1139.00 won earlier.

The trader said it is difficult to pick a range for the won "because it is really driven by sentiment" at the moment, but added that the dollar is likely to hold above 1130.00 won.

Against the peso, meanwhile, the U.S. dollar was trading at 42.85, up from 42.37 pesos late Tuesday and from 42.80 pesos earlier in the morning session, apparently unmoved by comments of support from the Philippines central bank.

Philippine Central Bank Governor Rafael Buenaventura said Wednesday a further rise in overnight rates - possibly by 0.50 percentage point - is being considered.

Patterson at J.P. Morgan, said, however, that from the market's perspective what will be required to provide greater stability to currency is stability at the government level.

Philippine central bankers have already jacked up rates 100 basis points last week to prop up the currency and its not yet helped much. "It's a very messy market and spreads have widened out considerably," said the dealer in Singapore.

The U.S. dollar was trading around Rp 8,460.00 late in the session, meanwhile, up from Rp 8,455.00 late Tuesday. "We've been seeing some onshore selling (of U.S. dollars) at these levels," he said.

The Thai baht, meanwhile, was also down a touch at 39.275 baht to the U.S. dollar, from 39.265 baht late Tuesday.

The U.S. currency is quoted at S$1.7347, up from S$1.7319. Analysts said news that Singapore's inflation rate in April was 1.1 percent, down from 1.2 percent in March, suggested the central bank can keep monetary policy steady, and as a result has little incentive to favor a stronger currency.

Against the Taiwan dollar, the U.S. currency was trading at NT$30.825, up from NT$30.749 late last session.