EM ASIA FX-Asia FX fall on U.S. fiscal breakthrough hope

Reuters

* Asian currencies slip vs broadly firmer dollar

* Hope for progress on U.S. budget impasse boosts dollar

* Thai baht touches 3-week low after triggering stops

(Updates prices, adds text)

By Masayuki Kitano

SINGAPORE, Oct 10 (Reuters) - Emerging Asian currencies fell

on Thursday as the dollar rose broadly on hopes that U.S.

lawmakers may be inching toward resolving a fiscal standoff and

averting the risk of a U.S. debt default.

U.S. House of Representatives Republicans are considering

signing on to a short-term increase in the government's

borrowing authority to buy time for negotiations on broader

policy measures, according to a Republican leadership aide.

Agreement by Republicans and Democrats to raise the debt

ceiling would at least stave off a possible default after Oct.

17, when Treasury Secretary Jack Lew has determined the

government will no longer be able to borrow.

Against this backdrop, emerging Asian currencies slipped

broadly against the buoyant U.S. dollar, with the Thai baht

touching a three-week low.

Southeast Asian currencies generally retreated on a day when

their equities markets pushed higher, with Thai shares

gaining 0.8 percent.

"The dollar is being bought broadly," said a trader for a

Japanese bank in Singapore.

Other traders echoed that sentiment, saying Thursday's drop

in Asian currencies was mostly about the U.S. dollar's firmness,

rather than factors specific to Asia.

The South Korean won slipped 0.2 percent, partly

because of dollar demand from local importers.

Traders shrugged off the Bank of Korea's decision to hold

interest rates steady for a fifth consecutive month as the

widely anticipated move and comments from the news conference

did not greatly change near-term policy prospects.

THAI BAHT

The Thai baht touched a three-week low of 31.54 versus the

dollar.

A trader for a Thai bank in Bangkok said the dollar's rise

against the baht gained added steam after triggering stop-loss

dollar-buying at levels around 31.50.

Another Bangkok-based trader said, however, that there

seemed to be a heavy concentration of dollar sellers at levels

above 31.50.

The dollar faces resistance at its 55-day moving average

near 31.55 against the baht. Further away there is more

resistance at 31.68, which is the 50 percent retracement of the

dollar's Sept. 6 to Sept. 20 drop.

INDONESIAN RUPIAH

Indonesia's central bank, in a bid to reduce volatility in

the rupiah, has encouraged the country's state-controlled

enterprises to use hedging to manage their foreign-exchange

needs.

In a statement on Wednesday, Bank Indonesia (BI) specified

that the country's regulations on hedging also apply to

state-owned companies and not just private ones and individuals.

A Jakarta-based trader said such currency hedging could

involve "forwards and swaps", adding that an aim of the measures

was to try to increase the depth of Indonesia's financial

market.

CURRENCIES VS U.S. DOLLAR

*Taiwan's financial markets are closed on Thursday for a

public holiday.

*Won's previous close is from Oct. 8. South Korean markets

were closed on Wednesday for a public holiday.

Change on the day at 0500 GMT

Currency Latest bid Previous day Pct Move

Japan yen 97.80 97.35 -0.46

Sing dlr 1.2533 1.2499 -0.27

Taiwan dlr 29.516 29.548 +0.11

Korean won 1075.70 1073.70 -0.19

Baht 31.47 31.44 -0.10

Peso 43.23 43.14 -0.21

Rupiah 11540.00 11520.00 -0.17

Rupee 62.18 61.93 -0.40

Ringgit 3.2065 3.2000 -0.20

Yuan 6.1195 6.1211 +0.03

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 97.80 86.79 -11.26

Sing dlr 1.2533 1.2219 -2.51

Taiwan dlr 29.516 29.136 -1.29

Korean won 1075.70 1070.60 -0.47

Baht 31.47 30.61 -2.73

Peso 43.23 41.05 -5.04

Rupiah 11540.00 9630.00 -16.55

Rupee 62.18 54.99 -11.56

Ringgit 3.2065 3.0580 -4.63

Yuan 6.1195 6.2303 +1.81

------------------------------------------------

(Additional reporting by Yena Park in SEOUL; Editing by Kim

Coghill)

View Comments (0)