Asian monies mostly lower, peso up on tighter policy

Asian monies mostly lower, peso up on tighter policy

HONG KONG (Dow Jones): Most Asian currencies ended regional dealing hours Friday lower against the U.S. dollar following a nearly featureless trading session.

In Southeast Asia, the Singapore dollar, the Thai baht and the Indonesian rupiah all closed slightly lower, but the Philippine peso gained ground after the country's central bank tightened monetary policy a notch.

In North Asia, the New Taiwan dollar was nudged a touch lower by the local central bank, while the South Korean won finished flat on the day.

Market participants said the softness of the regional currencies reflected the general strength of the U.S. dollar, as well as a reluctance to take on board new risks ahead of the weekend and the release, due later Friday, of U.S. employment data for February.

"The Japanese yen may have strengthened over the last few days, but the dollar is still very strong overall," said a trader at a Singapore bank.

Dealers blamed a large overnight customer order to buy euros against the Singapore dollar for the Singapore currency's fall against the U.S. dollar. The order was variously attributed to purchases of big ticket capital goods by Singapore companies or to Singapore corporations making equity investments in Europe.

Whatever the cause, the order triggered a round of position adjustments in the Singapore market Friday, which weighed on the local currency.

Toward the end of Asian trading, the U.S. dollar had climbed to S$1.7223, up from S$1.7161 the previous day. With the U.S. currency again trading above S$1.7200, many dealers believe the U.S. dollar could breach the S$1.7300 level in the coming week, potentially hitting levels around S$1.7320.

The Thai baht also lost ground, with the dollar edging higher to 37.9550 baht, up from 37.9250 baht late Thursday.

With a court judgment in the $3.5 billion Thai Petrochemical Industry bankruptcy case postponed until March 15, many traders believe 38.50 baht is a realistic short-term target.

The rupiah dropped back after Indonesian corporate customers took advantage of Thursday's rally in the local currency to buy dollars.

Late Friday in Asia, the U.S. currency was quoted at Rp 7,442 rupiah, up from Rp 7,435 the day before.

In Manila the Philippine peso strengthened after the central bank abolished its two-tier borrowing rate, effectively raising overnight interest rates by around 25 basis points to 8.75 percent.

Explaining the move, the first in four months, central bank Governor Rafael Buenaventura said the tightening anticipates a rate rise by the U.S. Federal Reserve later this month.

"Given the expected move in the U.S., we figured it's time to put some minor adjustments," he said.

The action bolstered sentiment towards the peso, and dollar sales pushed the U.S. currency lower to close at 40.880 pesos, compared with 40.920 pesos the previous day.

In North Asia, U.S. dollar purchases by the Central Bank of China - the Taiwanese central bank - were sufficient to check the New Taiwan dollar's recent appreciation. At the close the U.S. currency had been lifted to NT$30.745, from NT$30.712 on Thursday.

The won closed flat as Thursday's run-up in the Seoul stock market ran out of steam, and foreign exchange market participants heeded official threats of intervention should the won rise too far or too fast for the Korean authorities' comfort.

At the close the dollar was unchanged at 1,121.40 won.