SE Asian monies gain as dollar falls against yen

SE Asian monies gain as dollar falls against yen

SINGAPORE (Dow Jones): Southeast Asian currencies ended Asian trading stronger against the U.S. dollar Thursday, following the U.S. currency's tumble against the yen during European trading hours Wednesday.

North Asian currencies strengthened too.

After Wednesday's move caught many market participants still sitting on long U.S. dollar positions against the regionals, some traders suggested that the U.S. currency still has further to fall, especially against the Singapore dollar, before finding a base.

The drop seen Thursday was limited, however, and overall market activity was extremely subdued. With many regional centers, including Singapore and Hong Kong, on holiday Friday, few traders were willing to assume fresh positions.

The U.S. currency opened sharply lower against the Singapore dollar, and fell further during the course of the Asian session.

"We had some good names selling (U.S.) dollars at S$1.7320" late Wednesday, said a trader at a U.S. bank in Singapore. "With the market long (U.S.) dollars, and such a big move in dollar/yen, people had to get out of their longs."

Selling pressure saw the U.S. currency dip all the way to end Asian trading Thursday at S$1.7245, down from S$1.7295 at the close of the local interbank market Wednesday.

Although the U.S. dollar is expected to find some support at levels between S$1.7200 and S$1.7250, many participants feel the U.S. currency was overdue for a correction, and are looking for a retracement to levels around S$1.7150 before buying again.

The U.S. dollar also ended lower against the Thai baht, although up from its earlier lows after encountering solid buying support above 37.50 baht.

Dealers said easier offshore interest rates on the baht would tend to argue in favor of the Thai currency weakening, with the U.S. dollar rising toward 37.80 baht, its recent ceiling.

But given the general absence of speculative or investment participation in the market at present, there are few players around to take advantage of the opportunity, traders noted.

Toward the end of Asian trading, the U.S. dollar was quoted at 37.5900 baht, down from 37.6450 baht late the previous day.

The U.S. currency also ended a touch lower against the Indonesian rupiah, with dealers reporting some interest in selling U.S. dollars at levels around Rp 8,600. Following the closure of the domestic market Wednesday for the fiscal year-end book closing, and ahead of a public holiday Friday, however, levels of activity were minimal.

Toward the end of local trading in the rupiah, the U.S. dollar was quoted at Rp 8,585, down from Rp 8,690 the day before.

With Manila closed for the Easter holiday, no trading took place on the Philippine Dealing System Thursday.

In North Asia, both the New Taiwan dollar and the South Korean won followed the yen higher.

Against the Taiwanese currency, the U.S. dollar was sold down to close at NT$33.123, compared with NT$33.143 at Wednesday's close.

In Seoul, the first day of trading under Korea's new liberalized foreign-exchange regulations had little obvious impact on the won's spot rate, despite a sharp fall in offshore U.S. dollar/won non-deliverable forward rates.

At the close of local trading, the U.S. dollar was at 1,223.80 won, down from 1,227.00 won the previous day.