Won, baht hit 1 month lows, rupiah improves

Won, baht hit 1 month lows, rupiah improves

HONG KONG (Dow Jones): The South Korean won and the Thai baht
both fell to their lowest levels in a month, and the Philippine
peso hit a three-month low Thursday, as Asian currencies weakened
against the U.S. dollar for the second day running.

Position-squaring by foreign banks covering exposure to the
local currencies got the blame for forcing the baht and the peso
down.

Elsewhere, the Singapore dollar ended Asian trading slightly
weaker, and the New Taiwan dollar closed flat.

The Indonesian rupiah bucked the regional trend, however,
strengthening sharply on fresh buying by foreign investment
funds.

For once, neither the Korean central bank nor the major state-
owned banks were said to be the main forces behind the U.S.
dollar buying that drove the won lower.

By the end of local trading in Seoul, the U.S. dollar had been
pushed up to 1,180.60 won, sharply higher than 1,173.00 won at
Wednesday's close.

Although the dollar-buying pushed the won to its lowest level
since June 9, most analysts retained their bullish outlook on the
Korean currency.

Purchases of the U.S. currency against the baht by U.S. and
European banks that went short the U.S. dollar last week were
blamed for depressing the Thai currency to its lowest level since
early June.

Late in Asian trading, the U.S. dollar was quoted at 37.0400
baht, up from 36.8850 baht the day before. With dollar selling
interest seen emerging from Bangkok at the dollar's highs for the
day, dealers said the U.S. currency would struggle to climb above
37.10 baht in the near term.

Continued position-squaring was also behind the weakening of
the Philippine peso, as the currency dropped to its lowest level
since early April.

At the close of local trading Thursday, the U.S. dollar was
quoted at 38.440 pesos, up from 38.300 pesos the day before.

Elsewhere in Asia, the Singapore dollar ended a touch weaker,
although market activity remains very subdued following the MAS's
intervention late Tuesday.

Toward the end of Asian interbank trading, the U.S. dollar was
quoted at S$1.6992, up from S$1.6970 the previous day.

With a number of participants believed still to be sitting on
loss-making short positions in the U.S. dollar, the U.S. currency
could easily rise further, to levels above S$1.7050, traders
warned.

The New Taiwan dollar closed unchanged from Wednesday, with
the U.S. currency closing in Taipei at NT$32.285.

The Indonesian rupiah, however, bucked the regional trend,
rising on what a trader at a major U.S. bank attributed to a
renewed inflow of capital from foreign fund managers looking to
invest in the Indonesian equity market.

By late in Asian trading, the U.S. dollar had been pushed down
to Rp 6,620, from Rp 6,770 late the day before. With good selling
interest likely to cap the market at Rp 6,800 to Rp 6,900, "it
looks like the dollar is going to try lower to test Rp 6,600," he
said.