EM ASIA FX-Fed relief spurs inflows to Asia; rupee, rupiah jump

Reuters

* Ringgit, baht leap on real money funds demand

* Rupiah jumps on inflows; corp dlr demand limits upside

* Philippine c.bank says to remain in FX market

* Thai c.bank says ready to act in FX market if needed

(Updates prices, adds details.)

By Jongwoo Cheon

SINGAPORE, Sept 19 (Reuters) - The Indian rupee led a rally

in emerging Asian currencies on Thursday after the U.S. Federal

Reserve surprised investors by postponing the start of

reductions to its monetary stimulus, prompting capital inflows

to the region.

The Fed said it wanted to wait for more evidence of solid

growth in the world's top economy and Chairman Ben Bernanke

refused to commit to reducing bond purchases this year,

stressing that the programme was "not on a preset course."

"Asian currencies should stage a strong comeback," said

Frances Cheung, senior strategist at Credit Agricole CIB in Hong

Kong.

"From the perspectives of correlations with U.S. Treasury

yields and the fact that some (countries) had suffered due to

their economies' external deficits, the Indian rupee and the

Indonesian rupiah should benefit the most from the delayed

tapering," Cheung said.

The rupee surged as much as 2.8 percent to a near

five-week high, outperforming regional currencies.

The Indonesian rupiah advanced 1.5 percent on

capital inflows, traders said.

The Thai baht and the Malaysian ringgit

also enjoyed demand from real money funds, while the Philippine

peso gained on offshore funds buying.

The South Korean won rose in offshore forwards markets, with

local financial markets closed for holidays. One-month

non-deliverable forwards (NDFs) to the dollar were

quoted at 1,072.1 versus around 1,083 on Wednesday afternoon.

Regional stocks rallied broadly while U.S. bond yields and

the dollar dropped.

Most emerging Asian currencies have fallen so far this year

as the Fed was expected to scale back its $85 billion monthly

bond-buying programme. That caused capital outflows from the

region, especially Southeast Asia.

The rupiah and the rupee led the regional depreciation as

India and Indonesia were seen more vulnerable to a potential Fed

policy shift because of the countries' current account deficits.

However, the jubilation over the Fed's move is unlikely to

last long in emerging Asia as there are still tapering risks,

some analysts and traders said.

Some emerging Asian currencies are now seen as technically

overbought, they added.

"We are seeing overshooting for now in Asia," said Saktiandi

Supaat, head of FX research for Maybank in Singapore.

"Dollar strength will return. U.S. data may come in better

over time, that will lead to further taper expectations. We are

not done yet."

POSSIBLE ASIA INTERVENTION

With the global economy still fragile, Asian foreign

exchange authorities are likely to remain wary of letting their

currencies appreciate too far, too fast, threatening export

competitiveness.

Earlier, the Philippine central bank said it would keep

intervening in the currency market to manage wild swings.

The governor of the Bank of Thailand also said that central

bank is ready to act on excessive currency move.

Some Asian authorities, such as South Korea and Taiwan, have

already been recently spotted intervening to stem their currency

appreciation, according to traders.

RINGGIT

The ringgit jumped as much as 2.5 percent to 3.1560 per

dollar, its strongest since July 11.

In addition to demand from real money funds, the Malaysian

currency found more support as investors covered short positions

both against the U.S. dollar and the Singapore dollar

, traders said.

Against the city-state's currency, the ringgit advanced 2.2

percent to 2.5357, its strongest since July 29.

Still, Malaysian importers bought the U.S. dollars for

payment, limiting the ringgit's upside, traders said.

It has a chart resistance area around 3.1520-3.1570 to the

greenback, analysts said.

BAHT

The baht leapt as much as 2.4 percent to 30.940 per dollar,

its strongest since July 25.

Bangkok shares jumped more than 3 percent, while 5-

and 10-year government bond yields

plunged.

The Thai currency faces chart resistance at 30.966, the 38.2

percent Fibonacci retracement of its April-September

depreciation.

It also has a 100-day moving average at 30.929. The Thai

unit has been stayed weaker than the average since mid-May.

But the baht may head to 30.840, its July's high, if the

currency clears those resistance lines, analysts said.

RUPIAH

The rupiah rose 2.4 percent to 11,195 per dollar on capital

inflows and Indonesian shares jumped more than 4

percent.

The Indonesian currency gave up some of earlier gains on

sustained dollar demand from local companies such as importers,

traders said.

The forwards market did not point to further appreciation,

with its one-month NDFs to the dollar weakening to

10,983 at a point.

"As long as the dollar demand is still huge, the 11,000 will

be a good support," said a Jakarta-based trader, referring to

spot dollar's value to the rupiah.

The trader said there were more importer clients than

exporters.

PHILIPPINE PESO

The peso gained 1.1 percent to 43.05 against the greenback,

its strongest since July 1, on demand from offshore funds.

But it also pared initial gains as the central bank was

suspected of buying dollars to stem its upside, along with its

governor's comments, traders said.

"It should because we are lagging the other currencies in

the region," said a Philippine bank trader in Manila, when asked

if the peso would strengthen further.

The peso may head to 42.93, the trader expected.

"But if the central bank doesn't stop buying dollars, then

we will just remain stuck here."

CURRENCIES VS U.S. DOLLAR

Change on the day at 0445 GMT

Currency Latest bid Previous day Pct Move

Japan yen 98.40 97.96 -0.45

Sing dlr 1.2444 1.2460 +0.13

*Taiwan dlr 29.722 29.752 +0.10

*Korean won 1069.90 1084.10 +1.33

Baht 31.00 31.68 +2.18

Peso 43.11 43.53 +0.99

Rupiah 11288.00 11460.00 +1.52

Rupee 61.82 63.38 +2.52

Ringgit 3.1620 3.2340 +2.28

*Yuan 6.1212 6.1215 +0.00

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 98.40 86.79 -11.80

Sing dlr 1.2444 1.2219 -1.81

Taiwan dlr 29.722 29.136 -1.97

Korean won 1069.90 1070.60 +0.07

Baht 31.00 30.61 -1.26

Peso 43.11 41.05 -4.77

Rupiah 11288.00 9630.00 -14.69

Rupee 61.82 54.99 -11.05

Ringgit 3.1620 3.0580 -3.29

Yuan 6.1212 6.2303 +1.78

* Financial markets in China, South Korea and Taiwan are closed

for holidays Thursday and Friday.

(Additional reporting by Choonsik Yoo in SEOUL; Editing by Kim

Coghill)

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