Asian monies mixed, rupiah firmer

Asian monies mixed, rupiah firmer

Dow Jones, Singapore

Intervention by regional central banks and short covering on the dollar ahead of the weekend reined in Asian currencies late on Friday despite the weak tone of the U.S. unit.

The Thai baht and the Philippine peso were lower; the Indonesian rupiah was firmer; and the Singapore dollar and New Taiwan dollar were steady. South Korean markets were closed for a public holiday.

The rupiah was boosted by continued inflows of funds into the local capital market by investors seeking higher returns, traders said.

After a choppy session, the dollar closed local trading at Rp 8,180, down from Rp 8,225 Thursday.

Although profit taking pulled the dollar out of its intraday trough of Rp 8,170, traders said it remains on track to head lower.

"People still believe the dollar will fall to Rp 8,100," said a dealer with a local bank. "It's only a matter of time."

The Thai baht rose to a fresh 10-month high of 41.47 to the dollar.

Traders in Singapore said Thailand's central bank, via agent banks, aggressively bought dollars from the 41.50 baht level through the session.

Around early afternoon, Bank of Thailand Governor Pridiyathorn Devakula told reporters he expects the dollar to regain ground against the baht. He said the baht will soon weaken because it's likely to move in line with regional counterparts.

"We are monitoring its movement," he said. At the time of his comments, the dollar was trading around 41.53 baht.

At 0911 GMT (4.11 p.m. Jakarta time), the dollar was quoted around 41.65 baht, up from 41.58 baht at the Asian close late on Thursday.

Meantime, there was also talk that the Monetary Authority of Singapore intervened to support the U.S. currency on Friday, although several traders said there was little evidence to support the speculation.

A European bank trader said several U.S. and local banks were buyers of the U.S. currency, but that they were likely covering short positions ahead of the weekend.

Late in the local session, the U.S. unit was quoted at US$1.7235, little changed from S$1.7233 late on Thursday.

The New Taiwan dollar snapped a four-session winning streak to end flat on heavy intervention by Taiwan's central bank late in the session, traders said.

The U.S. dollar closed at its intraday high of NT$34.665, unchanged from Thursday.

The U.S. currency had traded below NT$34.635 for most of the session amid the inflow of foreign funds into local stocks, and also the strong yen, traders said.

But a flurry of dollar buying by the central bank in late trading pulled up the U.S. unit.

The Philippine peso was driven to its lowest closing in more than two months by higher corporate demand for dollars, and also as banks built up dollar positions amid lower domestic interest rates, traders said.

The dollar closed at 53.450 pesos on the Philippine Dealing System, up from 53.330 pesos on Thursday, marking its strongest finish since March 31.

Banks bought dollars to capitalize on the narrowing of differential between U.S. and domestic rates after the central bank's de facto easing of monetary policy Thursday.

The central bank reinstated the tiered interest rate system on its overnight borrowing, which effectively lowered the overnight borrowing rate to a three-tiered rate of 1 percent, 4 percent and 7 percent, from a flat 7 percent.

"The restoration of the tiering system makes banks more liquid in pesos, and the dollar is the only attractive instrument to place these funds at this time," said a Manila-based trader with a local bank.