SE Asian currencies edge higher late

SE Asian currencies edge higher late

SINGAPORE (Dow Jones): Southeast Asian currencies traded sideways within well established ranges on Wednesday, ending Asian hours mostly higher against the U.S. dollar.

The Singapore dollar ended the day stronger, boosted by position adjustments ahead of the coming long weekend and by the late rise in the yen. The Thai baht also rose slightly, supported by tight liquidity in the offshore market, according to traders.

With Bank Indonesia's clearing system shut down for account- squaring at the end of the local fiscal year, almost no trading took place in the rupiah, although some U.S. dollar offers were seen in the Singapore market.

The Philippine peso ended a curtailed trading session slightly lower.

In North Asia, the South Korean won finished down ahead of the introduction of new, more liberal foreign exchange trading rules on Thursday. The new Taiwan dollar ended flat.

With many regional markets closed for a holiday on Friday, and some closed Monday, trading activity was thin and dominated largely by position adjustments ahead of the long weekend.

Although business in the Singapore dollar was brisker than in other regional markets, the currency remained tightly rangebound through much of the Asian session.

Large U.S. dollar sales early in the day soon brought the U.S. currency down from its opening high of S$1.7340.

Market players who had gone long U.S. dollars against the Singapore dollar earlier in the week to pick up the extra yield carried by the U.S. currency over the long weekend, sold U.S. dollars to close their positions.

Trades struck Wednesday are settled when the New York market reopens on Tuesday after the Easter holiday, successfully capturing the carry, explained one trader at a Singapore bank.

Good support held the U.S. dollar above S$1.7300 through most of the session, although the U.S. currency's late slide against the yen did drag it below that level towards the end of Asian hours. Late in local trading, the U.S. dollar was at S$1.7295, down from S$1.7336 the previous day.

The U.S. dollar also ended a touch lower against the Thai baht. After pushing to an early high of 37.73 baht, near the top of its recent range, the U.S. dollar was subsequently sold down. According to one trader at a U.S. bank in Singapore, the move was triggered by purchases of the Thai currency in the cross-market against the yen.

In recent months short positions in the yen have widely been used to fund long baht positions, because of the favorable interest rate differential available.

Despite the U.S. dollar's downward move, most traders remained confident that support at 37.55 baht would hold firm, and that the U.S. dollar would still trade higher to retest resistance at 37.80 baht.

Late in Asian dealing, the U.S. dollar was quoted at 37.6450 baht, down from 37.6750 the day before.

The rupiah market remained largely shut down on Wednesday. With Bank Indonesia's clearing system closed, and with little risk appetite in the offshore market after Tuesday, when the central sucked up much of the available rupiah liquidity by selling U.S. dollars at same-day value, only a handful of deals were struck.

One European bank was seen offering to sell US$8 million to US$10 million, however, explaining the U.S. currency's moderate fall, according to dealers.

Late in Asia, the U.S. dollar was at Rp 8,690, down from Rp 8,725 on Tuesday.

In an abbreviated session on the Philippine Dealing System, the U.S. dollar rose against the peso in line with its early move higher against the yen.

At the close, the U.S. dollar was at 38.792 pesos, up from 38.775 the day before.

In North Asia the Korean won closed lower as banks and corporations bought U.S. dollars to meet foreign currency obligations falling due at the end of the quarter.

At the local close, the U.S. currency was quoted at 1,227.00 won, up from 1,224.60 on Tuesday.

Against the new Taiwan dollar, the U.S. dollar closed at NT$33.143, little changed from NT$33.145 the previous day.