Most SE Asian currencies edge higher

Most SE Asian currencies edge higher

SINGAPORE (Dow Jones): Southeast Asian currencies edged higher
against the U.S. dollar in late Asian trading Monday compared
with levels late Friday, but on moderate volumes.

Sharp inflows of funds to stock markets and other instruments
in the region, as well as overall improved sentiment toward the
region, continued to lift currencies Monday, said market players.

But the momentum for continued gains in regional currencies
may be slowly waning amid growing concerns that the rally could
go away like the one in February, as the fundamentals of the
Asian economies continue to be weak, they said.

A rally in Asian stocks Monday, with key regional indexes
gaining between 0.9 percent and 5.0 percent, fueled demand for
regional currencies, said market players.

The Singapore dollar, the Thai baht, New Taiwan dollar and
South Korean won all registered gains against the U.S. dollar.
The Indonesian rupiah slipped, while the market for trading in
the Philippine peso was closed Monday.

"There's a lot of capital inflows into the region. Money has
flowed into Thai stocks and bonds issued in Singapore. The market
is already long in (U.S.) dollar-baht and (U.S.) dollar-Sing,"
said the regional currencies head at a major UK bank here, adding
that there could be some profit-taking in the short term.

At 09:00 GMT, the U.S. dollar is at S$1.6205, down from
S$1.6255 in late Friday trading. The dollar is also at 36.62
baht, down from 36.70 Friday.

Intermediate support for the U.S. dollar is seen at S$1.6150
and further at S$1.6000, said market players. But they also
warned that the Singapore dollar's gains from these levels could
be limited, as the country's de facto central bank may be willing
to buy U.S. dollars to prevent a sharp rise in the local
currency.

In Thailand, the baht also benefited from fund inflows, said
market players.

"The major reason for gains in currencies is that sentiment
has improved. In some cases, especially Thailand, things have
improved earlier than people expected," said SE Banken regional
economist Chian Woon Kien. The dollar should stay below 40.00
baht in the short term, she said.

According to the latest report by Paribas Global Forex
Strategy issued Monday, there is some further downside bias for
the U.S. dollar against the baht, with support found at 35.55
baht and lower at 35.00.

The UK bank trader said market players are already long in the
U.S. dollar against the Singapore dollar and the baht, and
further gains toward support levels could be marginal.

In North Asia, the New Taiwan dollar ended at a seven-and-a-
half-month high against the U.S. dollar Monday as exporters
continued to sell the U.S. currency, said market players. The
local dollar's rise was aided by a weaker U.S. dollar against the
yen, said dealers.

At 08:00 GMT, the U.S. dollar ended lower at 32.440 New Taiwan
dollars, from Saturday's NT$32.450 close, the lowest close since
NT$32.438 on March 16.

Similarly, the South Korean won closed higher. The U.S.
currency closed at 1,318.70 won, lower than Friday's close of
1,319.

"On top of the yen's rise against the dollar, some local
exporters also sold the dollar belatedly, putting more pressure
on it," said Kim Yong-ho, a trader at Korea's Hanil Bank, adding
that the U.S. currency was also hurt by stock fund inflows from
overseas.

The yen was trading at 115.68-72 to the dollar, up from 116.07
in New York Friday afternoon and 116.07-10 in Tokyo late Friday.

Bucking the overall trend Monday was the Indonesian rupiah,
which ended lower. At 09:00 GMT, the dollar is at Rp 8,000, up
from 7,550 seen in late Friday dealings.