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.