Market sentiment on rupiah remains negative

Market sentiment on rupiah remains negative

HONG KONG (Dow Jones): Asian currencies ended a day of listless trading mostly a touch lower against the U.S. dollar Tuesday.

Their softness reflected an overnight rally in the U.S. currency against the yen and the widespread fall in regional equity markets following Monday's drop in U.S. stock prices.

The rupiah remained sidelined, with the dollar ending Asian trading hours at Rp 7,320, up from Rp 7,307 late Monday.

Although market sentiment toward the Indonesian currency remains strongly negative following widespread unrest in the country's outlying islands, dollar offers at Rp 3,350 look set to cap the U.S. currency for the time being, said traders.

The Philippine peso, however, bucked the regional trend as market participants sold dollars to exit long positions in the U.S. currency after the central bank in Manila announced it is to tighten foreign exchange reporting regulations.

By the close of trading in Manila sales had pushed the dollar down to 40.445 pesos, from 40.490 pesos the previous day.

In other regional markets the Singapore dollar ended Asian hours lower, weighed down by the fall of the yen and weaker local stock prices.

Short-term sentiment toward the Singapore currency also suffered from confirmation that Singapore Telecom is in talks with Cable & Wireless Plc to acquire a stake in Hong Kong telecommunications provider Cable & Wireless HKT.

Nevertheless, dealing was subdued, with few market players willing to assume fresh risks ahead of testimony later Tuesday from U.S. Federal Reserve chairman Alan Greenspan.

Toward the end of Asian trading the U.S. dollar was quoted against the Singapore currency at S$1.6842, up from S$1.6822 late Monday.

The baht also ended Asian hours a touch weaker in thin, choppy trading. Dollar buying late in the day by a U.S. and a European bank, thought by traders to have been executed on behalf of institutional clients, pushed the U.S. currency up to 37.265 baht, from 37.190 baht late Monday.

In North Asian markets the Korean won ended lower after an early stock market fall prompted dealers to cover short dollar positions against the local currency in anticipation of a capital outflow.

At the close, the U.S. dollar was quoted at 1,127.10 won, up from 1,124.00 won the previous day.

The new Taiwan dollar ended flat in light trading. At the close the U.S. dollar was at NT$30.813, compared with NT$31.812 Monday.