Asian monies up on dollar unwinding profit-taking

Singapore (Dow Jones): Asian currencies firmed late Thursday as market players unwound long-dollar positions and took profits on the U.S. unit after recent gains.

"Overall, there isn't much direction though there's some position adjusting. Some dollar longs are getting out after the market moved up quite a bit recently. There's also some profit-taking, "on the dollar/regional," a European bank trader said.

Rumors that Malaysia plans to revise the ringgit's 3.80 peg to the U.S. dollar to 3.40 further fueled a burst of dollar selling against the Singapore currency earlier in the day.

But traders and analysts dismissed the talk, noting that there wasn't any compelling reasons to prompt the Malaysian government to take such a step at present.

They said the speculation was likely sparked off ahead of the unveiling of the federal government budget Friday.

Bank of America said in a note that the Malaysian government is unlikely to make any changes to the ringgit peg in the next 12 months given the shaky global economy and prospects of a war in Iraq.

United Overseas Bank economist Low PingYee concurred. She added that Malaysia's export competitiveness isn't compromised, noting that the ringgit has weakened between 5 percent and 6 percent from late last year.

Late in Asia, the dollar was quoted around US$1.7693, from $1.7733 late Wednesday.

In the Philippines, market players shrugged off a further widening of the budget deficit in August as they had already expected the gap to exceed the government's full-year target.

The dollar ended at 52.285 pesos on the Philippine Dealing System, from 52.290 pesos Wednesday, after trading between 52.215 pesos and 52.290 pesos intraday. Volume fell to $76 million from $100.5 million previously.

In Indonesia, suspected dollar selling by the central bank, along with continued liquidation of long-dollar positions by interbank players, pulled the dollar down to its intraday low of Rp 8,990 earlier Thursday, traders said.

But toward the close of trading, demand from local companies with offshore debt, and the sharp 2.5 percent fall of the key stock index, helped the dollar recoup most of its losses.

The dollar closed at Rp 9,005, slightly below Wednesday's Rp 9,010.

In Taiwan, trading volumes were thin with investors reluctant to take fresh positions on either side after the central bank intervened in the currency market earlier in the week.

A trader said the lack of trading interest could also be due to diminishing equity-related outflows, which reduces demand for the U.S. currency.

The volatile movements of the dollar/yen also didn't provide much direction for the local unit, traders said.

The U.S. unit ended at 34.620 against the New Taiwan dollar, down from NT$34.685 Wednesday, with volume falling to $440 million from $597 million previously.

Intraday, the pair traded between NT$34.582 and NT$34.750.

In Thailand, corporate demand for dollars, coupled with suspected dollar buying by the central bank, helped the U.S. unit edge up in late trade.