U.S. dollar stands firm on APEC

U.S. dollar stands firm on APEC

Dow Jones, Singapore

The dollar firmed against most Asian currencies on Tuesday after regional leaders meeting at an economic summit apparently rebuffed U.S. calls for more flexibility in foreign exchange policy.

The U.S. currency strengthened against the South Korean won, the New Taiwan dollar, the Singapore dollar and the Philippine peso. It weakened against the Thai baht and was little changed against the Indonesian rupiah.

The lack of any reference to foreign exchange rates in the communique issued at the conclusion of the APEC summit indicates the U.S. received no commitment from Asian leaders to stop intervening in foreign exchange markets to suppress the strength of their currencies, analysts said.

President George W. Bush and other heads of state from the 21- nation Asia Pacific Economic Cooperation (APEC) forum wrapped up two days of meetings in Bangkok on Tuesday.

"There were expectations that the Asian Pacific Economic forum might produce an agreement on a weaker U.S. dollar against regional currencies, but judging from the statements we've seen that isn't going to happen, and bearish sentiment on the U.S. dollar is retreating," a currency trader in Taipei said.

Bank of America said, "Thus far, Bush's visit seems to have seen every Asian government rebut the U.S. call for 'flexibility."'

With the dollar forming such a base, and continuing signs of economic improvement in the U.S., the dollar could see further gains on short-covering, Bank of America said.

That was the case with the South Korean won, which tumbled to a 10-week low as players were forced to buy dollars to cover their short positions in the U.S. currency.

The U.S. unit got an added boost from local banks buying dollars to meet their foreign exchange provisioning requirements, traders said.

The dollar closed at 1,181.8 won on Tuesday, up from 1,174 won at the close on Monday but off a session high of 1,182.7 won.

Foreign outflows from the local stock market contributed to the New Taiwan dollar's fall to its lowest level in a month.

The U.S. dollar closed at NT$34.000, up from NT$33.915 on Monday.

Foreigners were net sellers of NT$1.13 billion of Taiwan shares on Tuesday, the first time equity sales by such investors outweighed purchases since Oct. 1.

Dollar short-covering and corporate demand for the U.S. currency from oil companies weighed on the peso.

The dollar closed at 54.850 peso on the Philippine Dealing System, up from 54.640 peso on Monday.

Fiscal concerns, revived by the overshoot in the government's budget deficit goal for September, and weakening economic data such as falling imports also have damped investor appetite for the peso.

The Singapore dollar recouped some of its early losses but still finished Asian hours weaker.

The U.S. dollar was quoted at S$1.7460 in late trading, up from S$1.7390 late in Asia on Monday.

The U.S. unit climbed as high as S$1.7490 in the first hour of trading before the Singapore dollar recovered in line with the yen's rise against the U.S. currency.

The baht strengthened slightly on the heels of the yen's mild gains.

Late in Asia, the dollar was quoted at 39.965 baht, down from 39.985 baht late on Monday.

The U.S. unit moved between 39.91 baht and 39.99 baht during local trading hours, driven largely by exporters selling dollars and offshore buying of them.

Against the rupiah, the dollar was quoted at Rp 8,442 near the end of Asian trading, little changed from Rp 8,440 at its close on Monday.

Traders said underlying sentiment for the rupiah remains positive ahead of the initial public offering of a 36 percent stake in Bank Rakyat Indonesia later this month.