Southeast Asian monies down

Southeast Asian monies down

SINGAPORE (Dow Jones): Southeast Asian currencies have started
the Year of the Rabbit on a weaker note on Thursday, after the
U.S. dollar pushed dramatically higher against the yen in New
York on Tuesday, when many regional markets were shut for Lunar
new year celebrations.

At late trading, the dollar was trading at Y118.85, well up
from Y114.24 in late Asian trading Monday. Thin market liquidity
Thursday kept the dollar range-bound against the yen and regional
currencies, traders said, adding that activity would remain muted
for the rest of the week, with Taiwan, Hong Kong and China still
closed for new year's festivities.

Daniel Lian, head of Asian markets research at ANZ Bank in
Singapore, said the Bank of Japan will "ultimately bow to
pressure and start underwriting new issuance of JGBs," meaning
that the yen will depreciate, perhaps to Y140 to Y150 against the
dollar.

"The ultimate impact of such a probable yen move, coupled with
no further rate cuts from the (U.S. Federal Reserve), must be
pretty negative for Asian currencies," he said. "In fact, most of
the offshore players we surveyed in the past week indicated that
they expect deliverable Asian currencies to lose between 5
percent to 8 percent of spot values against the U.S. dollar."

In late trading, the U.S. dollar was trading at S$1.6980, up
from $1.6890 late Monday. Traders said the key psychological
level at S$1.70 would be breached if the U.S. dollar makes any
more gains against the yen.

The dollar was also trading at 36.93 baht, up from 36.7750
baht late Monday. Traders said the yen's descent has affected the
strength of the baht, although the U.S. currency continues to
move within a wide range-bound band.

"The baht shows how the regionals are somewhat impervious to
moves by major currencies," said a trader at a U.S. investment
bank in Singapore. "If the U.S. dollar breaks above Y120, then
we'll start to see some moves in the regionals. Right now, the
lack of liquidity and closed markets - in Hong Kong and Taiwan -
have created a lag in the market."

The dollar was also trading at 8,775 rupiah, up from 8,635
Rupiah Monday. Traders expect the U.S. dollar to move between
8,500 rupiah and 9,000 rupiah in coming sessions.

The dollar was also trading at 38.66 pesos on the Philippine
Dealing System, up from 38.60 pesos late Monday.

Supple said the peso is fairly valued against the dollar. "The
early emergence of the Philippine economy from the regional
recession, added to a competitive export sector, highlights the
attractiveness of the peso in the region," he said. "While a
stronger U.S. dollar will see an upward bias in the dollar-peso,
the one-year, non-deliverable forward rate of around 42 pesos
appears an adequate if not attractive risk premium for holding
pesos."

In North Asia, the dollar was trading at 1,181.8 won, up from
1,175.7 won late Monday. The U.S. currency was also at 32.278 new
Taiwan dollars, flat since Monday as the market remains closed
for the Chinese New Year holiday.