Asian monies up, rupiah at 9,050

Asian monies up, rupiah at 9,050

Ryan Woo, Dow Jones, Singapore

Asian currencies extended last week's gains Monday, some of them breaking through key technical levels, as they capitalized on the U.S. dollar's continued weakness, particularly against the yen.

The surging Singapore dollar rose to a seven-month high against the dollar, as the U.S. currency slipped below key support at S$1.7900 en route to an intraday low of S$1.7886.

The U.S. currency also dropped to a fresh 15-month low against the South Korean won and continued to wallow at a nine-month low versus the Indonesian rupiah.

Traders in Asia were looking to dump dollars from the start of Monday's session after the U.S. currency lost more than two yen in frenetic New York trading last Friday. The dollar remained under pressure against its Japanese counterpart to start the week, closing out the Tokyo session Monday at 125.78 yen versus 125.87 yen late Friday in New York, as investors shifted capital into Japan amid hopes that the nation's economy has finally bottomed out.

The foundering dollar, by eroding the competitiveness of Asian exports, raises concerns that fledgling economic recoveries in several Asia-Pacific nations could get sideswiped before they manage to get off the ground.

Mindful of that threat, officials in some countries complained Monday about the U.S. currency's recent slump.

Kim Yong-Duk, Deputy Minister for International Affairs at South Korea's Ministry of Finance and Economy characterized the dollar's fall against the won as "abrupt and large," and he explained, "Although it reflects the dollar's global weakness to a certain extent, the (dollar/won's) fall is prompting emotional uneasiness among market players...and it's no good."

Kim added that the ministry might intervene in the currency markets to support the dollar and cap the won.

Kim was speaking as the dollar dropped to an intraday low of 1,251.5 won. The dollar later pared its losses, closing at 1,253.6 won, down from 1,261.6 won Friday and representing a new 15-month low.

The latest dollar-won slide came two days before the release of key South Korean economic data. The gross domestic product data, due at 0300 GMT Wednesday, are expected to show that economic growth accelerated in the first quarter of the year.

The Singapore dollar also benefited both from the dollar's woes and a deepening perception that the island nation's economy is looking increasingly robust after the government released data Friday showing that economic growth accelerated in the January- March period to an annualized 7.7 percent on quarter.

The dollar ended the session at S$1.7910, down from S$1.7950 late Friday.

The Singapore dollar also continued to benefit from comments made Friday by a Monetary Authority of Singapore official who said the MAS is "comfortable" with the currency's present levels, a statement some traders took to mean the MAS would allow the local dollar to strengthen further without intervening.

The Philippine peso, buoyed by the yen, closed at a 14-month high, as the U.S. dollar fell to 49.355 pesos from 49.460 pesos Friday.

"The global sentiment is for a weaker dollar," said a dealer with a local bank. "Why go against the tide?"

Indeed, Central bank Governor Rafael Buenaventura told reporters Monday that the peso's appreciation is broadly consistent with the trend in the region, and a former finance secretary said the peso remains undervalued.

The Bankers Association of the Philippines' newly elected President Cesar Virata said, "The peso is so undervalued and that's why so many analysts are saying that the improvement in the exchange rate is just getting the right value of the peso."

A former finance secretary during the Marcos administration, Virata earlier this month took the helm of the BAP, which represents the country's 46 commercial banks.

Elsewhere in Asia, the Indonesian rupiah ended higher in line with the region's currencies, as the dollar edged lower to a close of Rp9,050, down from Rp9,080 at Friday's close. The rupiah rallied as high as Rp9,000 but failed to breach the level. Local companies that need to repay foreign loans were bidding for the U.S. currency, dealers said.

Meantime, the dollar fell to new 15-month low of 42.53 baht before recovering slightly to 42.585 baht, down from 42.73 baht at Friday's close.

Only one central bank in Asia actually tried to support the dollar Monday. A dealer said the Taiwanese central bank tried to slow the local currency's rise, buying "between US$800 million and US$900 million."

But the New Taiwan dollar still ended higher, as the dollar fell to NT$34.412, its lowest close since June 20, 2001.