Dollar falls against most Asian currencies

Dollar falls against most Asian currencies

SINGAPORE (Dow Jones): The U.S. dollar's slide against the yen
helped push both the South Korean won and the New Taiwan dollar
higher during Asian trading on Monday.

The Philippine peso also rose, but the U.S. dollar's plunge
against the Japanese currency caused barely a ripple in Southeast
Asia's other foreign exchange markets, as the Singapore dollar
and the baht continued to drift sideways, attracting minimal
interest. The Indonesian rupiah ended unchanged in a flat calm.

Although the U.S. dollar's fall may have failed to enliven
desultory end-of-the-year trading in Southeast Asia's foreign
exchange markets, it did help the won nudge slightly higher, as
the U.S. currency slipped ever nearer to the psychologically
important 1,200 won.

At the close of local trading in Seoul on Monday, the U.S.
currency was quoted at 1,204 won, down from 1,207 won at Friday's
finish.

Although the New Taiwan dollar also rose Monday, analysts said
it was harder to call the direction of the Taiwanese currency.
Most agreed that the New Taiwan dollar would continue to shadow
the yen, while warning that the Central Bank of China, Taiwan's
central bank, would intervene periodically to smooth the local
currency's progress.

Speaking on Monday, central bank Governor Perng Fai-Nan said
the authorities will only intervene to "adjust" the foreign
exchange market when abnormal conditions adversely affect
sentiment toward the local currency. In principle, he said, the
New Taiwan dollar's exchange rate is set by market forces.

At the close of domestic trading Monday, the U.S. dollar was
quoted at NT$32.258, down from NT$32.284 at the end of the
previous session.

The Philippine peso also benefited from the U.S. dollar's
weakness against the yen. At the close of dealing in Manila, the
U.S. currency was at 38.96 pesos, down from 39.04 pesos on
Friday.

Elsewhere in Southeast Asia, markets hardly stirred on Monday.
Announcements of planned tariff cuts and investment
liberalization issued by the assembled ministers of the
Association of Southeast Asian Nations, currently meeting in
Hanoi, were ignored by market participants as far too distant to
affect sentiment.

The baht did waver slightly, as rumors circulated in the
foreign exchange market that the Financial Sector Restructuring
Authority's asset auction, due to be completed on Tuesday, had
failed to attract the hoped-for levels of foreign interest.

Despite the rumors, however, the Thai currency ended little
changed as most market participants remained sidelined awaiting
official notification of the auction's results.

"The inclination to trade is simply not there," said one
Singapore-based dealer at a U.S. bank.

Late in Asian hours, the U.S. dollar was quoted at 35.7350
baht, up just a fraction from 35.7250 baht late on Friday.

The Singapore dollar, meanwhile, remained range-bound against
the U.S. dollar.

Despite the U.S. currency's weakness against the yen, traders
shied away from selling the U.S. dollar aggressively against the
local currency, afraid that the Monetary Authority of Singapore
was poised to enter the market and buy dollars, should the U.S.
currency dip below the S$1.6450 level.

With few natural sellers of the local currency in evidence,
the U.S. dollar just drifted sideways.

According to the treasurer of one Singapore bank, the market's
nervousness at provoking MAS intervention isn't justified.

"There is no real (U.S. dollar buying) interest at the moment.
I think the market (for the U.S. dollar) will just drift lower,"
he said, predicting that the U.S. currency will ease towards
S$1.6400 in the course of the week.

Late in Asian trading, the U.S. dollar was quoted at S$1.6470,
down from S$1.6490 late Friday.

The rupiah ended Asian hours flat, with the U.S. dollar
unchanged at 7,525.