Asian currencies: Taiwan dollar, rupiah slip

The Taiwan dollar hit a 10-month low against the US dollar on Thursday as the currency extended this week's losses despite expectations the central bank would lift interest rates later in the day.
The Indonesian rupiah also fell after failing to extend gains beyond the key 10,000 per dollar level, but other Asian currencies hugged a tight range before US data that should shed light on the impact of Hurricane Katrina on the economy.
The Taiwan dollar fell a third of a percent to 32.873 per dollar, its weakest level since November 2004. It has lost 3.8 percent since the end of June as Taiwan's trade surplus has shrunk due to slowing exports and rising oil import costs.
The Taiwan currency hit an eight-year low against the South Korean won, indicating Taiwan's relative decline against one of its biggest Asian export competitors.
Taiwan's central bank is expected to raise its discount rate by 12.5 or 25 basis points from 2.0 percent to curb inflationary pressures. The announcement is expected at around 0900 GMT.
"The market has priced in the rate move," said one trader in Singapore. "The market is thin and we broke the highs for the year, so there has been a lot of stop-loss buying of dollars."
The rupiah slipped about a half a percent to around 10,065 per dollar, after having briefly strengthened beyond the 10,000 mark to its highest in three weeks on Wednesday.
"The market was a bit surprised that the drop (in the dollar) was quite fast in the past two days," said a Jakarta trader of the rupiah's gains this week.
"The market is slightly bullish on the dollar overall, so everyone is happy to stay long dollar for a while."
Dealers said weakness in Indonesia's stock market undermined the rupiah.
Jimmy Koh, head of research at United Overseas Bank, said the stock market could determine whether the rupiah made a decisive break through 10,000 in the days ahead.
"If we see stocks break above a recent high around 1,100, we could see the rupiah pierce through 10,000," he said.
Trade in other Asian currencies was lacklustre as markets waited on manufacturing reports from Federal Reserve Banks in New York and Philadelphia that should provide a glimpse of the impact of Hurricane Katrina on the US economy.
Markets do not expect the hurricane to prevent the Federal Open Market Committee (FOMC) from lifting US interest rates at a meeting next week. Still, dealers expected a note a caution to prevail until then.