Asian monies mixed, markets focused on Iraq

Asian monies mixed, markets focused on Iraq

Dow Jones, Singapore

Asian currencies drifted in tight ranges with no real direction as market players fixated on the war in Iraq and hesitated to take strong positions ahead of the weekend.

Late Friday, the South Korean won and the New Taiwan dollar were weaker, while the Philippine peso, the Indonesian rupiah and the Singapore dollar were firmer. The Thai baht was little changed.

Thailand's central bank Governor Pridiyathorn Devakula said the U.S.-led war, launched during the Asian morning Thursday, hasn't had any major impact on the baht so far. But he said it will take a couple of weeks before any effect becomes apparent.

Late in Asia, the dollar was quoted around 42.93 baht, from 42.94 baht on Thursday.

Meantime, South Korea's central bank said the local foreign exchange market is stabilizing. In an interview with Dow Jones Newswires, Bank of Korea Assistant Governor Lee Jae-Ouk said market conditions look more favorable since the start of the war.

The won fell as importers and offshore players bid up the dollar, with the U.S. unit closing at 1,247.4 won, slightly up from 1,246.0 won at the previous close.

Many market players prefer to hold dollars as expectations of a short war in Iraq stoke worries that North Korea could be the next target for the U.S. But few suggest it will use force to deal with the North Korea threat.

"Many people believe the Iraq war will end soon and then the U.S. will focus on North Korea. That's the focus right now," said a dealer.

But dollar sales by exporters, and caution over possible verbal or actual intervention by authorities capped the dollar's gains, market players said.

Better-than-expected fourth quarter 2002 economic growth data didn't have any impact on the won.

The Indonesian central bank weighed in on Friday, saying it stands ready to intervene in the foreign exchange market to support the rupiah during the war in Iraq.

With foreign exchange reserves of US$32 billion, the country has adequate funds to stage a defense of the rupiah if necessary, central bank governor, Sjahril Sabirin, told reporters.

Late in Asia, the dollar slipped below the Rp 9,000 mark to trade around Rp 8,990, down from Rp 9,030 on Thursday.

The New Taiwan dollar weakened marginally, helped partly by the local central bank buying the U.S. unit to counter selling by exporters, dealers said.

The U.S. dollar ended at NT$34.791, up from NT$34.775 on Thursday. Trading volume dropped more than 50 percent to $303 million.

The Philippine peso recouped early losses to close at a fresh three-week high as banks sold excess dollar holdings.

After rising as high as 54.720 peso, the dollar ended at 53.450 peso on the Philippine Dealing System, down from 54.480 peso at the previous close.

Against the Singapore dollar, the U.S. unit was quoted around $1.7679 late in Asia, down from $1.7684 on Thursday.