Most Asian monies down, SARS, war boost dollar

Most Asian monies down, SARS, war boost dollar

Dow Jones, Singapore

Most Asian currencies weakened against the dollar on Thursday,
pressured by a combination of dollar-positive Iraq war news and
concerns that a deadly pneumonia virus could derail regional
economic growth.

The advance of the U.S. troops to within miles of Baghdad,
with relatively few casualties, provided a lift for the dollar as
hopes were renewed that the war could be relatively short-lived.

However, some market participants expressed concern that once
inside the Iraqi capital, coalition forces might get bogged down
in bloody street fighting that could include the use of chemical
or biological weapons by Iraqi troops.

"It is still not clear how the war will turn out," DBS Bank
said in a research note. "The significant push by U.S.-led forces
toward Baghdad over the past 24 hours does provide some hope that
the war may end soon."

The parade of investment banks cutting their economic growth
forecasts for Asia due to the spread of severe acute respiratory
syndrome continued Thursday.

ING Financial Markets was the latest to weigh in, trimming its
2003 growth forecast for Hong to 2.5 percent from 3 percent. Over
the past few days more than half-a-dozen banks and brokerages
have cut their forecasts for various Asian economies, citing the
negative impact SARS is having on the tourism, retail and
consumer services industries.

Asia has been the epicenter of the SARS outbreak, accounting
for more than 90 percent of the 2,223 cases reported worldwide.
In addition, 72 of the 78 SARS deaths globally have occurred in
Asia.

The Singapore dollar has been hit particularly hard by the
SARS outbreak. Singapore ranks third behind China and Hong Kong
in reported SARS cases, although officials said there are signs
the situation is stabilizing in the city-state.

Late in Asia, the U.S. dollar was quoted at S$1.7715, up from
S$1.7690 late on Wednesday.

The U.S. dollar's rise was kept in check by concerns that the
Monetary Authority of Singapore might intervene to keep the local
currency within a trade-weighted band that the MAS uses as a
guideline for managing the Singapore dollar's movements.

Against the New Taiwan dollar, the U.S. dollar closed at its
intraday high of NT$34.812, up from Wednesday's close of
NT$34.798.

Exporters helped slow the local currency's fall by selling
U.S. dollars above the NT$34.80 level, traders said.

The South Korean won gave up its early gains to finish
marginally weaker. Foreigners' sales of local stocks weighed on
the won late in the session. The dollar finished at 1,255.0 won,
slightly up from Wednesday's close of 1,254.0 won.

A stronger yen and a report from local online news provider
MoneyToday underpinned the won early in the session, dealers
said.

The report quoted Moody's senior analyst Thomas Bryne as
saying the credit outlook for South Korea is a bit better, with
U.S.-South Korea ties growing more solid.

The Philippine peso recouped its early losses to finish
slightly higher in quiet trading. The dollar closed at its
intraday low of 53.110 pesos, down from 53.160 pesos on
Wednesday.

The Indonesian rupiah weakened slightly as dollar demand from
local importers perked up.

The dollar closed at Rp 8,890, up slightly from Tuesday's
close of Rp 8,885. Financial markets in Jakarta were closed for a
public holiday Wednesday and offshore rupiah trading is virtually
nonexistent.

The Thai baht tracked the yen's late session decline to finish
Asian hours slightly weaker. Near the end of Asian trading the
dollar was quoted at 42.98 baht, up from 42.96 baht a day
earlier.