Asian monies mostly higher in late trade

Asian monies mostly higher in late trade

SINGAPORE (Dow Jones): Most Asian currencies strengthened late Tuesday, finding solace from a pause in the Japanese yen's recent descent, dealers said.

North Asian currencies, which had been hardest hit by the yen's weakness in recent weeks, profited from the dollar's correction below Y118.

At 0900 GMT, the dollar was quoted at Y118.38, below Y118.75 late Monday in New York, on market talk that U.S. Treasury Secretary-designate Paul O'Neill will announce at his Senate confirmation hearings on Wednesday that the Bush administration could soften the country's strong-dollar policy. The dollar was at Y119.15 late Monday in Tokyo.

Besides finding support from the yen, higher funding costs in the offshore market and market fears Thailand might follow Indonesia's footsteps in cutting the limit on forward deals with non-residents also bolstered the baht, dealers said.

The fine-tuning of Indonesia's foreign exchange control regulations failed to salvage the rupiah, which drifted lower.

The dollar closed at Rp 9,480, up from Rp 9,440 late Monday.

Around 1,000 demonstrators gathered outside presidential palace on Tuesday, demanding President Abdurrahman Wahid resign. The size of the protest was small but it could escalate in coming days, dealers said. The Tuesday protest came after rumors of a protest on Monday against Wahid didn't materialize.

"Any dollar fall provides a good buying opportunity as the rupiah remains hostage to domestic politics," said a dealer with a foreign bank.

Healthy dollar demand from local companies is also weighing on the local currency, dealers added.

But the bigger loser was the Philippine currency, which skidded to yet another record intraday low of 52.95 pesos against the dollar, amid growing concerns that President Joseph Estrada might be acquitted in the Senate impeachment trial, a move that could trigger political unrest, dealers said.

"The market is beginning to price in that acquittal somewhat more strongly than before," said David Simmonds, a regional currency strategist at Salomon Smith Barney/Citigroup.

The dollar closed at 52.780 pesos on the Philippine Dealing System, up from 52.400 pesos on Monday.

The New Taiwan dollar rose on the yen's rebound, foreign equity fund inflows and a ruling by Taiwan's top judges on a controversial cabinet decision to scrap a nuclear power plant, which averted a constitutional crisis and fueled optimism that the project could be completed, dealers said.

The U.S. dollar ended at NT$32.686, down from Monday's close of NT$32.699. The main stock index surged 5.3% on the court ruling, announced late Monday.

The Taiwan currency relinquished some of its gains late in the day as the central bank bought U.S. dollars to stabilize the market and to curb the strength of the local currency, given the recent declines in the yen and the won, dealers said. Taiwan, South Korea and Japan need to keep their currencies competitive since they compete in similar export markets.

In Seoul, the won's gains were relatively modest. The dollar finished at 1,283.5 won, down from 1,285.8 won at Monday's close.

The Thai currency strengthened to 43.235 baht against the dollar, compared with 43.455 baht late Monday.

Higher offshore baht funding costs and fears the central bank might emulate Indonesia's moves in tightening its foreign exchange regulations prompted offshore participants to liquidate their long dollar positions, dealers said.

Against the Singapore dollar, the U.S. currency was steady at S$1.7356.