Most Asian monies higher, rupiah falls

Most Asian monies higher, rupiah falls

Dow Jones, Singapore

Ongoing concerns about the U.S. economy and stock markets pushed the dollar lower against most Asian currencies Tuesday.

Only the Philippine peso and Indonesian rupiah failed to take advantage of the dollar's global weakness.

Most other regional currencies continued to trade at multi- month highs, with the South Korean won and New Taiwan dollar posting their best performances in 17 months and one year respectively.

The dollar opened the Asian trading day on the defensive, with overnight declines in U.S. equity markets underscoring the negative wave of sentiment weighing on the currency.

"The weakening bias in the U.S. dollar persists, with the new week kicking off in an increasingly familiar manner," BNP Paribas said in a note to clients.

Sizable declines in both the Dow Jones Industrial Average and the Nasdaq Composite Index overwhelmed a report from the Institute for Supply Management that showed the U.S. manufacturing sector grew robustly in May.

In Seoul, a new round of verbal intervention by South Korean authorities briefly halted the won's rise, but the currency continued its climb shortly thereafter as exporters resumed their dollar sales.

The dollar finished at 1,220.1 won, down from Monday's close at 1,226.3 won, and its lowest level since December 2000.

Concerned that the won was appreciating too rapidly, the Finance Ministry issued a statement that it was concerned about market "uneasiness" and would take necessary action.

"No one believes what the government says anymore," said a dealer at a local bank. "Unless there's some actual dollar purchase by the government, the market isn't likely to react."

The South Korean government has repeatedly threatened action in the foreign exchange market over the past three weeks, but has yet to take any concrete steps.

Against the New Taiwan dollar, the U.S. dollar ended at NT$34.093, down from NT$34.139 Monday. It was the Taiwan currency's strongest finish since last June.

Dealers said the U.S. dollar's decline will likely slow as it reaches the NT$34.00 support level. The central bank is also expected to support the U.S. currency to prevent it from falling to sharply.

The peso came under pressure following negative news regarding the country's budget deficit, and a brewing political storm in the government.

The dollar closed at 50.430 pesos on the Philippine Dealing System, up from 50.360 pesos Monday.

Reports that tax collections for May were lower than expected fueled ongoing concerns that the government may not be able to meet its budget deficit target for the year.

The government has already overshot its budget target for the first quarter.

Sentiment toward the peso also was dented by what many termed as a "senate coup" staged Monday, when opposition lawmakers wrested the leadership of the chamber from senators allied with President Gloria Macapagal Arroyo's government.

The defection of a government-allied senator has given the opposition control of 12 of the chamber's 24 seats.

"The market is concerned that such political events might backlash on the government's economic agenda," said a trader with a local bank.

The Indonesian rupiah weakened slightly after market participants booked profits following the local currency's recent rally, traders said.

Late in Asia the dollar was quoted at Rp 8,650, up from Rp 8,540 at Monday's close.

The rupiah rallied to nine month high Monday due to investor optimism regarding the country's debt restructuring effort, and economic outlook.

The Singapore dollar tracked the yen and other regional currencies higher.

Near the end of Asian trading the U.S. dollar was quoted at S$1.7836, down from S$1.7878 late Monday.

The market has been reluctant to sell the U.S. dollar more aggressively for fear the Monetary Authority of Singapore may intervene in the market to support the U.S. currency, dealers said.

The baht also moved in tandem with its regional peers with little in the way of domestic news to drive trading.

Late in Asia the dollar was quoted at 42.31 baht, down from 42.38 baht late Monday.