SE Asian currencies slide in thin trading

SE Asian currencies slide in thin trading

SINGAPORE (Dow Jones): The seemingly unstoppable slide of the
yen dragged most Southeast Asian currencies lower yesterday.

Even with transaction volumes greatly diminished by the
closure of trading rooms in Singapore for a public holiday
marking Sunday's National Day, there was little support for the
regional currencies. After the U.S. currency broke upward through
key resistance levels against the ringgit and the Singapore
dollar in New York trading hours on Friday, the dollar maintained
its upward trend throughout Asian hours on Monday, ending higher
across the board, despite some profit-taking.

Of Southeast Asian currencies, only the baht held its own
against the U.S. dollar, boosted, said traders, by market
participants selling U.S. dollars to book profits from short
positions in the local currency.

The Japanese yen was under pressure yesterday with investors
disappointed by Prime Minister Keizo Obuchi's policy speech last
week, dealers said.

The Japanese unit plunged to as low as 146.53, the lowest
level against the dollar since mid-June, in early afternoon
trading.

In a late trading, the Japanese yen traded at 146.41.

The yen's fall amid market disappointment in the economic
program of Japanese prime minister Keizo Obuchi helped the U.S.
dollar to break above psychological resistance at S$1.7500 and
4.0000 ringgit late Friday.

Although brokers in Singapore reported good interest to take
profits from the U.S. dollar's run-up, the U.S. currency
maintained its level against the Singapore dollar through Asian
hours on Monday, dropping back only slightly from early highs to
trade at S$1.7520 in late trading yesterday. Late Friday in Asia,
the U.S. currency was at S$1.7455.

Against the ringgit, the U.S. dollar continued its bull run
after Bank Negara trimmed 50 basis points off its three-month
money market rate. The second cut in as many weeks, the move,
which lowered the central bank's intervention rate to 10 percent
from 10.50 percent, had been widely expected.

Nevertheless, the rate cut did nothing to improve ringgit
sentiment, already severely damaged by Friday's rumors -
strenuously denied by authorities in Kuala Lumpur - of riots in
the capital. By late afternoon trading, the U.S. dollar had risen
to 4.2250 ringgit , up from 4.1800 ringgit late Friday.

In marked contrast to Bank Negara, the Central Bank of the
Philippines jacked up its key overnight borrowing rate by two
percentage points to 15 percent from 13 percent, in an attempt to
support the plunging peso.

The move, which comes into effect on Tuesday was at least
partly successful. After hitting a high of 44.790 pesos on the
Philippine Dealing System, the U.S. currency dropped back after
the announcement of the rate hike to trade at 44.100 pesos, up
from PHP43.490 at Friday's close.

Elsewhere in the region, the rupiah also fell, with the dollar
rising to 13,000 rupiah, up from 12,750 rupiah late Friday.

The Thai baht, however, appreciated against the U.S. dollar,
propelled higher, said traders, as market participants sold the
U.S. currency to take profits after the dollar last week broke up
through 42.00 baht.

In afternoon trading in Asia, the dollar was quoted at 41.7250
baht, down from 41.9550 baht toward Friday's Asian close.

In North Asia, a lessening of the speculative pressure, which
last week battered the Hong Kong dollar's fixed link to the U.S.
dollar, sending interest rates sharply higher, provided little
respite for the won or the New Taiwan dollar.

By late in Asian trading, the benchmark three-month Hibor rate
had slipped back to 11 percent from 12.75 percent late in Asia
Friday.

At the same time however, the yen's fall undermined the South
Korean currency, against which the U.S. dollar finished domestic
trading at 1,338 won, up from 1,326 won.

Meanwhile, heavy central bank intervention failed to support
the New Taiwan dollar, which dropped to a six-week low against
the U.S. currency. Despite U.S. dollar sales estimated to amount
to $100 million, at the close of domestic trading the U.S. dollar
was quoted at NT$34.781, up from NT$34.60 late Friday.