SE Asian currencies mixed in run-up to Xmas holidays

SE Asian currencies mixed in run-up to Xmas holidays

SINGAPORE (Dow Jones): Asian currencies were mixed against the
U.S. dollar in thin trading late Wednesday.

The Philippine peso and New Taiwan dollar did manage to move
slightly higher, benefiting from a rise in the yen against the
U.S. dollar early in the Asian trading session.

U.S. dollar buying interest eventually drove the Korean won,
Singapore dollar, and Thai baht lower, traders said, while
Indonesia's rupiah was generally flat.

"Asian currencies were trapped in extremely dull trading as
market participants lost all appetite to trade in market
conditions," said Thio Chin Loo, Asian foreign exchange
strategist at Banque Paribas in Singapore.

"However, further signs of official discomfort over the
strength of Asian currencies have emerged, with central bank
activity cited in the Singapore dollar and Korean won,"

The Bank of Thailand also said on Tuesday that Thailand's
export recovery could be hampered by the stronger than expected
baht.

The Korean government has urged the Bank of Korea to intervene
to prevent any significant strengthening of the won.

"Significant strengthening of the Asian currencies from
current levels remains unlikely, and with the mixed dollar-yen
trend until year-end, Asian currencies could very well end the
year very much unchanged from current levels."

Traders - sitting in half-full trading rooms, watching
interbank markets bereft of activity - agree with the economist's
year-end forecast, as well.

At 09:00 GMT (4:00 a.m. EST), the U.S. dollar was trading at
1,211.4 won, up from 1,201.5 in late trading Tuesday.

Traders said a cautious market reacted predictably to
Tuesday's comments by a Ministry of Finance and Economy official
who said the government may buy U.S. dollars to cap the won's
recent gains in order to retain export competitiveness.

The U.S. dollar was also trading at S$1.6551, up from S$1.6538
late Tuesday, as reports and market rumors continue to surface
about the Monetary Authority of Singapore's apparent keenness to
let the republic's currency slide.

Singapore's foreign currency reserves have been climbing an
average of 9.2 percent between June and October, according to
government figures released yesterday. That's proof, analysts
said, that the MAS is taking an active role in curtailing the
Singapore dollar's strength.

The U.S. dollar was trading at 36.37 baht, up from 36.3450
late Tuesday.

Traders said the market, while extremely thin, saw some
interest to buy U.S. dollars late in the day as reports
circulated that it could take as long as six months to debate
government-backed financial bills, slowing Thailand's economic
progress.

The U.S. dollar was trading at 7,789 rupiah, barely unchanged
from 7,785 late Tuesday, although the U.S. currency looked as
though it might move above 7,900 during the session.

Traders said some U.S. dollar buying interest by offshore
banks has been dragging the rupiah lower, but U.S. dollar selling
interest by Indonesian state banks has also apparent, keeping the
currency range bound.

"The central bank appears content with the U.S. dollar moving
between 7,500 and 8,000," said a trader at a Japanese bank in
Singapore.

On the Philippine Dealing System, the U.S. dollar was trading
at 39.015 pesos, down from 39.105 late Tuesday.

"The peso should continue to be underpinned early next year
though it may be unsettled by current yen weakness in the
interim," said an economist at Standard Chartered Bank in
Singapore.

In North Asia, the U.S. dollar was also trading at NT$32.247,
down from NT$32.253 late Tuesday.