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Asian currencies lifted by weak dollar, but won wobbles

SINGAPORE: Most Asian currencies firmed on Monday as players adjusted their positions in line with the US dollar's decline against major currencies.

The Singapore dollar rose near one-week highs, and the South Korean won was pulled off early lows by last-minute dollar sales by exporters.

The won had earlier eased to its weakest level since March 20, hurt by weak economic data at home and political factors including the Iraq war and tensions with North Korea.

Dealer and analysts said despite the gains in most regionals, the price action was limited to small ranges and actual trades were scarce as reflected by the wider than usual bid and offer spread in some currencies.

"People are just reluctant to take on much in terms of emerging Asian risk," said James Malcolm, currency strategist at JP Morgan Chase in Singapore.

"There is a stock of negative factors which is weighing against that," he added pointing to the war in Iraq, tensions in North Korea and a killer respiratory viral flu sweeping across the region.

Malcolm like most dealers said the flu factor, which has claimed lives in China, Hong Kong and Singapore, had yet to affect the direction of any currency but was certainly a hot issue being discussed in the market.

"A lot of people overseas have questions about what sort of growth impact this flu is going to have on places like Hong Kong, Singapore and China," he said.

On Saturday, United States health officials added Singapore to the list of Asian destinations - China, Hong Kong and Hanoi - that should be avoided by tourists and business travellers.

Analysts feared concerns about the flu could hurt the region's multibillion dollar tourism industry.

Still, the Singapore dollar was pushed higher as mostly foreign names were spotted unwinding long US dollar positions, hitting stop-loss sell orders first at around 1.7685 and then close to the 1.7650 level.

That pushed the Sing dollar near one-week highs around 1.7628.

The Thai baht was firmer, but stuck in a narrow 42.845-42.935 per dollar range, with exporters capping the downside by selling dollars for month-end requirements.

Dealers said pressure on the baht came from local corporates that were spotted buying US dollars and yen against the baht for debt repayments.

The International Monetary Fund's announcement on Friday that it had approved a delayed release of a $469 million loan tranche for Indonesia had little impact on the rupiah.

Dealers in Jakarta said the rupiah had already bounced off lows around 9,150 hit on March 20 and was likely to stay within a narrow range around the 8,900 level with market focus on growing public resentment against the US-led war in Iraq.

Over 100,000 angry Indonesians were out on the streets of Jakarta on Sunday in one of the biggest protests in the world's most populous Muslim nation.

The Philippine peso eased to a low of 53.66 per dollar, but ended slightly higher at 53.52 as banks remained wary of building long dollar positions after eight of them were penalised by the authorities for violating regulations last week.-Reuters