Most Asian currencies steady against dollar

19 Jul, 2005

The South Korean won rallied against the dollar on Monday as Seoul's share index hit a 10-1/2 year high, while strong inflows from overseas workers helped push the Philippine peso to its highest level in three weeks. Other Asian currencies were largely steady against the dollar, which drew support from improving economic numbers.
Trade was generally subdued with Japanese markets closed for a holiday, while Taiwan markets were closed due to a typhoon.
The peso gained about 0.4 percent from Friday's close to 55.60 per dollar, recovering some ground after a two-month long sell-off, helped also by a weekend rally in support of the country's embattled president.
The won was the day's biggest gainer, adding about 0.8 percent to hit a session high of 1,034 per dollar as Seoul shares posted their highest close in 10-1/2 years.
Export stocks rose on upbeat US data and Hyundai Group firms surged on news of plans to expand its tourism business in North Korea.
"Korea's stock market has been going very well recently and it does appear that real money managers continue to pile into the Korean stocks.
Mostly that is unhedged from a currency perspective, so it is a net positive for the Korean won," said Callum Henderson, head of currency strategy at Standard Chartered in Singapore.
Foreign investors bought a net 1.4 trillion won worth of Korean stocks over the past month, according to the Korea Exchange.
Filipinos working overseas sent $879 million home through commercial banks in May, 26.8 percent higher than a year earlier, the central bank said on Friday.
This together with hopes of some stability on the political front gave the peso a boost.
About 120,000 supporters of President Gloria Macapagal Arroyo poured into a park in the capital on Saturday for a much-needed show of strength that upstaged a recent rally by 30,000 protesters demanding she step down.
The opposition accuses Arroyo of cheating her way to victory in the 2004 election and her family of corruption.
"We've had strong flows from remittances and there is a bit of calm on the political front, so this is good news for the peso," said a Manila-based trader.
Central bank data showing the Philippines balance of payments surplus came in to $343 million in June from $751 million in May, had little immediate impact on the peso.
Premiums on offshore yuan derivatives scaled two-month peaks after Chen Dongqi, vice head of the China's Academy of Macro Economic Research, said in remarks published on Monday that the yuan's trading band should be widened to 3 percent to help reduce the country's large trade surplus.
Analysts said recent reports by investment banks saying that China may change its currency regime in the third quarter of the year also boosted buying of yuan non-deliverable forwards.

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