Firmer rupiah drives Asian currencies high<\/p>\n
SINGAPORE (Dow Jones): Asian currencies were firmer late on
\nThursday, basking in the Indonesian rupiah's ascent to a six-week
\nhigh.<\/p>\n
Snapping out of its recent consolidation against the rupiah,
\nthe dollar skidded through one support level after another late
\nThursday, helping extend the recent recovery of the other
\nSoutheast Asian currencies.<\/p>\n
\"The market got ahead of itself,\" said Mansoor Mohi-Uddin,
\nforeign exchange strategist at UBS Warburg. \"They've become too
\noverbearish on these currencies.\"<\/p>\n
In North Asia, the South Korean won and the New Taiwan dollar
\nalso rose on domestic factors.<\/p>\n
The Indonesian currency grabbed the limelight as market
\nparticipants bailed out of their long dollar positions on
\nspeculation government officials would pressure Indonesian
\nexporters at a meeting later Thursday to repatriate dollars, in
\nthe government's bid to boost the rupiah.<\/p>\n
The market wasn't convinced by the central bank's denial that
\nthis would be on their agenda at their meeting with large
\nIndonesian exporters at 0900 GMT. Market observers said the
\ngovernment will probably rely on \"moral suasion\", rather than
\nforce.<\/p>\n
Also boosting sentiment toward the rupiah was a growing
\nrealization that the political risks in Indonesia had been
\noverstated, following official assurances that President
\nAbdurrahman Wahid won't be impeached during the critical session
\nof Indonesia's top legislature which begins next week.<\/p>\n
Around 0755 GMT, the dollar was at Rp 8,675, down 2.6 percent
\nfrom Rp 8,908 late Wednesday. After breaching the psychological
\nsupport levels of Rp 8,800 and Rp 8,700 late in the day, the
\ndollar fell to as low as Rp 8,610, its weakest level since June
\n21.<\/p>\n
\"Offshore speculative players seem to have been squaring loss-
\nmaking long (dollar) positions,\" said Bank of America in a
\nreport, adding that some participants were adding short dollar
\npositions.<\/p>\n
While the dollar will find technical support around Rp 8,450,
\nit will likely remain buoyed around Rp 8,550 to Rp 8,600 in the
\nshort term, said Mohi-Uddin at UBS Warburg.<\/p>\n
Against the Thai baht, the dollar also broke below a critical
\nsupport level of 40.800 baht as offshore participants continued
\nto unwind their long dollar positions, dealers said.<\/p>\n
\"It's possibly cut-loss selling,\" a dealer at U.S. bank said.<\/p>\n
The dollar was at 40.725 baht, down from 40.925 baht late
\nWednesday.<\/p>\n
UBS Warburg's Mohi-uddin said the \"much, much bigger\" support
\nlevel of 40.480 baht \"should hold\".<\/p>\n
In the Singapore dollar market, the U.S. currency was at
\nS$1.7274, down from S$1.7285 late Wednesday. The U.S. dollar had
\nfallen to as low as S$1.7255 in early trading, but rebounded
\npartly on bids by local banks, dealers said.<\/p>\n
\"Some smart guys in the market reckon the Singapore dollar
\nrally is overdone, a mood supported by news that local banks
\n(were) bidding on the bottom-side of the (U.S. dollar),\" Bank of
\nAmerica said. \"However, our initial feeling is that the recent
\nshift has been appropriate and the Singapore dollar is roughly in
\nthe center of a new trading range.\"<\/p>\n
The Singapore dollar has rebounded sharply since the Monetary
\nAuthority of Singapore commented a week ago that it was prepared
\nto allow a modest and gradual appreciation of the Singapore
\ndollar to ward off imported inflationary pressures.<\/p>\n
In Manila, the dollar was at 44.685 pesos, down from
\nWednesday's close of 44.810 pesos.<\/p>\n
Dollar-selling by foreign investors in the local stock market
\nshored up the South Korean won, which didn't react to the central
\nbank's expected decision to leave its one-day call rate unchanged
\nin August around 5 percent, dealers said.<\/p>\n
The dollar finished at 1,114.80 won, down from Wednesday's
\nclose of 1,115.70 won.<\/p>\n
The New Taiwan dollar, which is expected to remain pressured
\nby the sluggish local stock market in the short term, found some
\nrespite when the central bank intervened in the market, dealers
\nsaid.<\/p>\n
The U.S. currency slipped to NT$31.078 from Wednesday's close
\nof NT31.086.<\/p>\n
While regional currencies will likely consolidate in the next
\nfew trading days, the bias for a stronger dollar remains, since
\nthe U.S. Federal Reserve may raise interest rates as early as
\nAug. 22, when it next holds its policy meeting, analysts said.<\/p>",
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