Regional currencies hold steady

Regional currencies hold steady

SINGAPORE (Dow Jones): Southeast Asian currencies scarcely budged during Asian trading hours on Friday, and most analysts and traders expect little to change over the coming week, predicting that regional markets will remain largely static.

Although a brief flurry of pre-weekend position-covering pushed the Singapore dollar marginally lower in afternoon trading, transaction volumes were derisory, according to dealers.

In other Southeast Asian markets the Thai baht, and the Philippine peso also eased back slightly as market players booked their profits by closing out long positions in the local currencies.

Most observers dismissed the falls as insignificant, however, forecasting that regional currencies will remain relatively strong against the U.S. dollar in the near term.

Ever the exception to the prevailing regional trend, the Indonesian rupiah confounded the market's expectations by ending the Asian day a touch higher against the U.S. dollar. But whereas few market participants can muster much optimism for the rupiah, most are qualified bulls towards Southeast Asia's other currencies.

Although most analysts are cautiously positive on regional currencies on a short- to medium-term view, many say that the markets' current stability is likely to prove a temporary phenomenon, warning that the long-term outlook for Asia's currencies is still bearish.

Most resilient of the Southeast Asian currencies to any renewed sell-off will be the Thai baht, say analysts, applauding the Bangkok government's progress towards economic and financial restructuring.

Late in Asian dealing on Friday, the U.S. currency was trading at 36.51 baht, up a fraction from 36.40 baht towards the end of trading on Thursday.

The Singapore dollar also fell back a touch on Friday, as market rumors that the Monetary Authority of Singapore was buying U.S. dollars spooked traders into hastily covering their short positions in the U.S. currency.

Late in Asian trading the U.S. dollar was being quoted at S$1.6286, up slightly from S$1.6239 at the same time the previous day.

Position-covering also dragged the Philippine peso lower on Friday.

At the close of trading on the Philippine Dealing System, the U.S. dollar was quoted at 39.96 pesos, up from 39.77 pesos at the previous day's close although off Friday's intraday high of 40.19 pesos.

Late in Asia on Friday, the U.S. currency was quoted at Rp 8,374, down from Rp 8,762 late the day before.

While most Southeast Asian currencies slipped on Friday, North Asian currencies rose, with both the new Taiwan dollar and the South Korean won boosted by flows of foreign funds into the local equity markets, and, in the case of the Taiwanese currency, central bank intervention.

At the close of trading in Taipei, the U.S. dollar was quoted at NT$32.507, down from NT$32.566 at the end of trading on Thursday.

In Seoul, the U.S. currency closed at 1,312 won, down from 1,316 won the previous day.

In Tokyo, the dollar rose against the yen on Friday after U.S. Federal Reserve chairman Alan Greenspan hinted that financial markets were beginning to stabilize, dealers said.

In late trading, the dollar was trading at 117.99-118.02 yen, up from 117.87-88 yen six hours earlier in Tokyo and 117.75 yen in New York late Thursday.

The dollar traded at 1.6620-23 marks, compared with 1.6572