Most Asian currencies gain ground

Most Asian currencies gain ground

SINGAPORE (Dow Jones): The Singapore dollar and the Thai baht
strengthened marginally, while the Philippine peso eased back in
another mixed session for Southeast Asian currency markets on
Tuesday.

The Indonesian rupiah closed steady against the U.S. dollar
Tuesday as participants continued staying on the sidelines ahead
of the June election.

The dollar closed at Rp 8,604 in the spot market, slightly
down from Rp 8,612 traded late Monday, as state banks sold a
meager amount of the U.S. currency.

"It seems that nobody wants to touch the rupiah at this time,"
said a dealer with a joint venture bank.

In North Asia, bullish sentiment towards local stock markets
continued to lift the South Korean won and the new Taiwan dollar,
as dealers reported sustained interest to buy regional currencies
from foreign investors.

The rise in the Singapore dollar, which saw the U.S. dollar
pushed below the psychologically important S$1.70 level, was
widely attributed to inflows of foreign portfolio funds destined
for investment in the local stock market, which now is up by 35
percent over the year to date.

Sales of the U.S. currency by a U.S. investment bank early in
the day caught the market long U.S. dollars against the Singapore
dollar, said traders, precipitating further sales, which drove
the U.S. currency to an intraday low of S$1.6970.

Even though the authorities failed to intervene to support the
U.S. currency at the S$1.70 level, dealers remain fearful that
the Monetary Authority of Singapore could step in should the U.S.
dollar fall much further and push the Singapore dollar out of
line on a trade-weighted basis.

Late in Asian trading the U.S. dollar had recovered slightly
from its earlier intraday low to be quoted at S$1.6988, down from
S$1.7060 late the previous day.

The slight rise of the Thai baht during Asian trading was
dismissed as insignificant by most dealers, who noted that the
U.S. currency remained locked in the 37.40 baht to 37.80 baht
range it has stuck to for over a week.

After dollar-buying failed to breach the top of that range
early Tuesday - with the U.S. currency topping out at THB37.75 -
a retracement was only to be expected, they said.

Late in Asia the U.S. currency had eased to 37.6150 baht, down
from 37.7150 baht late on Monday.

Elsewhere in the region, the Philippine peso lost ground to
the U.S. dollar as traders covered short positions in the U.S.
currency built up over recent weeks as the peso has strengthened.

At the close of local dealing, the U.S. dollar was quoted at
38.010 pesos, compared with 37.995 pesos at the end of Monday's
trading session.

In North Asia, the South Korean won further extended its
upward trend. Dealers said that customary month-end revenue
repatriation by local exporters compounded the effect of won-
buying by foreign investors, who continue to pour money into the
local stock market.

By the end of local trading on Tuesday the U.S. currency had
dropped to 1,182.90 won, down from 1,186.00 won the day before.

With officials not overly concerned about the level of the
stock market, many observers expect the equity rally to continue.

The new Taiwan dollar also ended higher as foreign fund flows
into the local stock market in Taipei continued unabated, despite
profit-taking by domestic investors.

At the close, the U.S. dollar was at NT$32.682, down from
NT$32.695 at Monday's close.