Southeast Asian currencies up on firmer yen

Southeast Asian currencies up on firmer yen

SINGAPORE (Dow Jones): Southeast Asian currencies rose against the dollar Tuesday in line with the Japanese yen.

Regional currencies have remained tightly rangebound with the yen over the past two weeks, leading some analysts to predict a small rally over the short term.

"As long as the yen is stable, there is no reason for Asian currencies to weaken much further from here," said Daniel Lian, head of Asian markets research for ANZ Investment Bank in Singapore.

"We are not calling for a sustainable rally, because the medium-term fundamentals have not improved dramatically," he cautioned.

In a late trading, the U.S. dollar was quoted at 4.1250 ringgit, down from 4.1502 ringgit late Monday.

Against the baht, the dollar is quoted at 40.9750 baht, down from 41.2050 baht Monday.

Meanwhile, the won closed sharply lower in volatile trading on fears the central bank may intervene stop its rise against the dollar. The won has engaged in a prolonged bull run against the U.S. currency since mid-June, when it stood at 1,433 won.

The dollar closed at 1,257 won, up from 1,209 won Monday. The dollar traded in a wide range between 1,185 won and 1,270 won.

Dealers in Singapore said that major U.S. banks began selling U.S. dollars for Singapore dollars late in the afternoon, and picked up the pace after London opened for business.

"I don't know what is behind it exactly," said a trader with a British bank. "They may be trying to hit some stop-loss orders."

In a late trading, the U.S. dollar was quoted at S$1.7110, down from S$1.7243 late Monday in Asia.

Indonesian rupiah traders will be watching the annual meeting of the Consultative Group on Indonesia today in Paris. The CGI is a group of countries that serve as international lenders to Indonesia.

Market participants expect that Indonesia will receive significantly more than the US$5.3 billion the group pledged last year, and the currency strengthened yesterday in anticipation.

In the late Asian trading, the U.S. dollar was quoted at 13,400 rupiah, down from 13,850 late Monday.

However, a U.S. bank trader in Singapore noted that there was very little actual rupiah trading done in the interbank market. "Most banks can't get good credit lines with Jakarta banks these days," the trader said.

On the Philippine Dealing System, the U.S. dollar ended at 42.085 pesos, down from 42.180 pesos on Monday.

Against the New Taiwan dollar, the U.S. dollar ended at NT$34.376, down from NT$34.409 on Monday.