Asian monies weaken against dollar despite rise in yen

Asian monies weaken against dollar despite rise in yen

HONG KONG (Dow Jones): Most Asian currencies weakened against
the U.S. dollar during local trading hours Monday, even though
the U.S. currency itself fell against the Japanese yen.

The Singapore dollar was the only regional currency to benefit
from the yen's strength. Others, including the Philippine peso,
the Thai baht, the New Taiwan dollar and the Korean won, all
ended the day lower.

Dealers in Singapore took heart from the rise of the yen to
bid up the local currency, assuming that, with the yen strong,
the Monetary Authority of Singapore would be less inclined to
intervene to hold the Singapore dollar down against the U.S.
currency.

Last week, according to traders, the MAS bought U.S. dollars
at S$1.6780 to maintain the local currency's neutrality against
the trade-weighted basket of currencies it tracks.

Monday, however, as the U.S. dollar dropped to a fresh five-
month low within a whisker of Y114.00, there was no sign of the
MAS in the market.

By late in Asian hours the U.S. currency had slipped to
S$1.6799, down from S$1.6864 toward the end of local trading
Friday.

Late in Asia the U.S. dollar was quoted at Rp 6,859, up from
Rp 6,835 Friday.

Other Southeast Asian currencies fared less well, with both
the Thai baht and the Philippine peso falling steeply against the
U.S. dollar.

Toward the end of Asian dealing, the U.S. dollar had risen to
37.3250 baht, up from 37.1200 baht late Friday.

Although the U.S. currency's rise against the baht has been
slowed by dollar sales by Thai exporters, the selling pressure is
moderate. According to traders, the offers are insufficiently
heavy to prevent the U.S. currency testing key resistance levels
between 37.40 baht and 37.45 baht.

The Philippine Central Bank's determination to keep interest
rates low despite the prospect of rising U.S. rates was the main
reason cited for the fall in the Philippine peso.

At Monday's Treasury bill auction, the government held the
one-month bill yield unchanged at 8.377 percent by rejecting bids
carrying higher yields.

Convinced that the authority will not raise domestic interest
rates to defend the peso, offshore players felt they had a green
light to bid up the U.S. dollar, pushing it through the
resistance at 38.50 pesos

At the close of Monday's trading session, which was curtailed
by heavy rain, the U.S. dollar was at 38.600 pesos, up from
38.500 pesos Friday.

In North Asia, the New Taiwan dollar was pushed lower during
intraday trading in response to China's moves to step up pressure
on Taiwan, with which it has been waging a war of words since
last month when Taiwanese president Lee Teng-hui attempted to set
cross-straits relations on a state-to-state basis.

U.S. dollar sales late in the session by the Central Bank of
China - Taiwan's central bank - succeeded in reversing the
market's direction, however. With the central bank constantly
poised to intervene in order to dampen any unwelcome volatility,
few market participants expect a drastic sell-off in the local
currency, even if relations deteriorate further.

At Monday's close, the U.S. dollar was quoted at NT$32.143,
down a fraction from NT$32.145 at Saturday's close.

The Korean won recovered from early losses to finish higher on
the day, as apparent progress toward restructuring the $9.94
billion of foreign currency debts owed by Korea's stricken Daewoo
Group lifted investor confidence.

At the close of local dealing, the U.S. dollar was quoted at
1,200.00 won, down from 1,204.00 won on Friday.

The Indonesian rupiah ended Asian hours little changed. News
that Indonesia's election commission had once again delayed the
official announcement of the results of June's parliamentary
election had little impact on the market.

The announcement of a sharp contraction in Indonesia's trade
surplus in June caused by a steep fall in exports to $3.56
billion from $4.48 billion in the same month a year earlier also
failed to move the rupiah, underscoring the general lack of
interest in the market, and the range-bound nature of current
trading.