* Baht outperforms on strong stocks, bonds
* Ringgit hits near 1-mth high; profit-taking caps
* Philippine peso up on catch-up plays; wary of intervention
(Adds text, updates prices)
By Jongwoo Cheon
SEOUL, Oct 17 (Reuters) - The Thai baht led gains among
emerging Asian currencies on Thursday as risk sentiment improved
after U.S. lawmakers approved a deal that averts a potential
default for the world's largest economy.
The baht rose on strong local stocks and bonds. The
Malaysian ringgit hit a near one-month high as
investors cut dollar holdings.
The Philippine peso advanced on short-covering.
The South Korean won touched a nine-month peak as
foreign investors were set to extend their net stock buying
spree to a record 35th session.
The U.S. Congress agreed on a deal to lift the country's
borrowing limit late on Wednesday and President Barack Obama
signed the bill and said the government was reopening
Still, investors hesitated to chase emerging Asian
currencies as the U.S. deal has not resolved the fundamental
problems of spending and deficits that divide Republican and
"The deal merely pushes the deadlines to early next year,
which means a similar drama could happen again," said Frances
Cheung, senior strategist at Credit Agricole CIB in Hong Kong.
"Sentiment would be broadly supported, but since much
optimism had been priced in by Asian currencies, the reaction
there may be relatively muted," Cheung added.
Most emerging Asian currencies gained during the first three
days this week on optimism that U.S. lawmakers would reach an
agreement to avoid a default.
The baht gained as Bangkok shares rose more than 1
The five-year bond yield slid to 3.55 percent,
the lowest since July 23.
The ringgit rose as much as 0.5 percent to 3.1560 per
dollar, its strongest since Sept. 20, as investors added long
positions in the Malaysian currency.
Three-year government bond yield fell to 3.190
percent, the lowest since June 19, and Kuala Lumpur stocks
rose 0.4 percent.
Still, some investors such as leveraged funds took profit
from the ringgit when it was firmer than 3.1600 per dollar.
Even though the American government is reopening, "the U.S.
situation is unclear," said a senior Malaysian bank trader in
"Nobody knows when the Fed tapering will happen. If the U.S.
economy is good and rates are firm, the dollar should be
higher," the trader added.
The peso advanced as investors covered short positions in
the currency, which had underperformed in Asia this week.
The Philippine currency fell 0.1 percent in the first three
days of the week, while most emerging Asian currencies gained.
Investors, however, hesitated to chase the peso, staying
cautious over possible intervention by the central bank.
"It looks like the resolution in Washington has a positive
effect on risk assets in the short term," said a senior
Philippine bank trader in Manila.
"Still, I expect official support (for dollar/peso) to come
in between 43.05 down to 43.00," the trader added.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0515 GMT
Currency Latest bid Previous day Pct Move
Japan yen 98.41 98.75 +0.35
Sing dlr 1.2436 1.2435 -0.01
Taiwan dlr 29.389 29.460 +0.24
Korean won 1063.20 1065.50 +0.22
Baht 31.10 31.27 +0.53
Peso 43.13 43.19 +0.15
Rupiah 11350.00 11340.00 -0.09
Rupee 61.55 61.84 +0.46
Ringgit 3.1600 3.1730 +0.41
Yuan 6.0966 6.1025 +0.10
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 98.41 86.79 -11.81
Sing dlr 1.2436 1.2219 -1.74
Taiwan dlr 29.389 29.136 -0.86
Korean won 1063.20 1070.60 +0.70
Baht 31.10 30.61 -1.58
Peso 43.13 41.05 -4.81
Rupiah 11350.00 9630.00 -15.15
Rupee 61.55 54.99 -10.66
Ringgit 3.1600 3.0580 -3.23
Yuan 6.0966 6.2303 +2.19
(Editing by Richard Borsuk)