Asian monies generally down but Korea won bucks trend

Asian monies generally down but Korea won bucks trend

SINGAPORE (Dow Jones): Most Asian currencies were weaker late
Wednesday as the sagging Indonesian rupiah continued to unsettle
its Southeast Asian counterparts.

In contrast, the South Korean won outshined its regional peers
as dollar-selling by exporters propelled the currency to a four-
month high.

After having been trapped in a range of 1,110 won to 1,120 won
over the past two months, the dollar finally collapsed below the
1,110 won psychological support level at the open.

The dollar finished at 1,108.50 won, its lowest closing level
since April 26, when it ended at 1,108.10 won. The U.S. currency
finished Tuesday at 1,110.10 won. The dollar had earlier fallen
to as low as 1,108.10, its weakest performance since April 26,
when it touched 1,107.60 won.

The wave of month-end dollar-selling by local exporters and
dollar-selling by offshore participants in the non-deliverable
forward market supported the won, but dollar buying by state
banks kept a rein on the U.S. currency's slide, dealers said.

After snapping out of its long-standing trading range, the won
is poised to make further gains, some analysts said.

The dollar could descend further to 1,105 won "over the next
week or two" and "possibly even lower," before eventually testing
the downside target of 1,100 won in the next few months, said
David Simmonds, a regional currency strategist at Salomon Smith
Barney/Citibank.

Southeast Asian currencies remained shaky as the Indonesian
rupiah extended Tuesday's decline on heightened concerns over
relations between the country's new economic team and the
International Monetary Fund.

The new senior economic minister, Rizal Ramli, known to be a
critic of the IMF, said in a statement late Tuesday that he may
want to change some details of the latest agreement with IMF that
was signed by the previous cabinet last month. Rizal had asked
the lending agency to delay its next disbursement of financial
aid to give time for a review of the $5 billion program.

Uncertainty about the nature or the extent of the planned
changes to the agreement has made the market nervous, dealers
said.

Rizal's comments had sent the rupiah reeling to as low as Rp
8,430 to the dollar in London trading hours Tuesday.

But the rupiah was well-contained within a range of Rp 8,370
to Rp 8,430 in Asia Wednesday. Dollar short-covering by offshore
players kept the currency buoyed, while heavy offers to sell the
dollar close to the Rp 8,450 level stymied the currency's rise.

Around 0840 GMT, the dollar was at Rp 8,385, up from Rp 8,300
late Tuesday in Asia.

Despite the market's concerns, Standard Chartered Bank's
treasury economist, Steve Brice, said Rizal's decision to review
the IMF program was unsurprising since the new economic team "is
just coming in to evaluate the system."

"We won't view it as too negative at this stage," Brice said,
but added that the government "doesn't have a lot of time."

"They really need to decide what they're going to do and do it
fairly quickly to restore market confidence," he said, adding
that he expects a "slightly weaker bias in the short term" for
the rupiah.

The rest of the Southeast Asian currencies felt the brunt of
the rupiah's weakness.

The Thai baht weakened to 40.985 baht to the dollar, from
40.875 baht late Tuesday.

Against the Singapore dollar, the U.S. currency edged up to
S$1.7230 from S$1.7213 late Tuesday.

Elsewhere, the dollar closed at 45.087 pesos on the Philippine
Dealing System, up from Tuesday's close of 45.035 pesos. The
dollar rose to a fresh one-month high earlier in the session at
45.105 pesos, its highest since 45.120 pesos on July 27.

In North Asia, the New Taiwan dollar finished marginally
higher as the central bank continued its efforts to prop up the
local currency, which remains vulnerable to a slumping local
stock market, dealers said.

The U.S. dollar ended at NT$31.067, down slightly from
NT$31.070 late Tuesday.