Most Asian currencies rebound

Most Asian currencies rebound

HONG KONG (Dow Jones): Asian currencies strengthened
Wednesday, recovering some of the ground lost in Tuesday's fall
as short-term market players were forced to cut back their long
positions in the U.S. dollar.

In Southeast Asia the baht, rupiah, Singapore dollar and
Philippine peso all ended Asian trading hours higher on the day.

The rupiah closed slightly higher against the U.S. dollar in
thin trading Wednesday as offshore participants cut their long
positions in the U.S. dollar.

The dollar closed at Rp 7,280 in Asia trade, down from Rp
7,300 late Tuesday.

"Offshore participants, who were caught long on dollar
liquidated their positions," said a dealer with a local bank.

Dealers said demand by local companies for the U.S. currency
was slightly less than dollar offers as local businesses waited
for the dollar to fall further before buying.

Dealers said the market shrugged off the lower-than-expected
month-on-month inflation rate for November, as the market viewed
the difference as benign.

The dollar is expected to trade between Rp 7,200 and Rp 7,400
Thursday, said dealers.

In North Asia solid investment inflows continued to support
the South Korean won and the New Taiwan dollar.

Despite the regional rally Wednesday, many analysts maintained
their view that Southeast Asian currencies will remain vulnerable
to selling pressure through December.

"The fears over Y2K may be overdone, but the concern will
remain at the back of traders' minds until the end of the year,
and corporate customers will still want to buy dollars," warned
Andrew Fung, treasury economist at Standard Chartered Bank in
Singapore.

Over the coming weeks, Fung said dollar-buying could drive the
U.S. currency above Tuesday's highs against the baht to reach
levels between 39.50 baht and 40.00 baht.

Warnings that the baht could weaken further had little impact
Wednesday, however, as market players who on Tuesday had gone
short on the Thai currency were forced by rising costs to cut
their positions, as demand for baht funding pushed offshore swap
rates higher.

According to dealers, much of the dollar's slide against the
baht was precipitated by sales from one U.S. bank which, having
gone long on dollars Tuesday at levels above 39.00 baht, was
forced Wednesday to cut its losses, selling to cover again at
levels as low as 38.92 baht.

Toward the end of Asian trading the U.S. currency had fallen
to 38.88 baht, down from 39.07 baht late Tuesday.

In North Asia a barrage of favorable economic data reinforced
buoyant investor sentiment in the won, forcing the central bank
to intervene in the Seoul market by buying dollars through local
banks to check the won's rise.

By the close of local trading, the dollar had dropped to
1,157.30 won from 1,159.20 won the day before.

Inflows on Wednesday also lifted the New Taiwan dollar, which
touched a new two-year high in intraday trading as the U.S.
currency dropped to NT$31.648.

At the local close in Taipei, the U.S. dollar was quoted at
NT$31.669, down from NT$31.672 Tuesday.