* Rupiah falls on corporate dlr demand
* Philippine peso down on dlr short-covering
* Won eases on intervention caution
(Adds text, updates prices)
By Jongwoo Cheon
Singapore, Sept 17 (Reuters) - Most emerging Asian
currencies fell on Tuesday as investors took profits ahead of
the Federal Reserve's two-day policy meeting, at which it is
expected to start dialing down its stimulus.
The Indian rupee led regional slides and the
Indonesian rupiah fell on local corporate dollar
demand. Those currencies were seen as more vulnerable to the
Fed's policy shift due to the countries' current account
The Philippine peso eased as investors covered
short positions in the dollar, while te South Korean won
weakened on caution over intervention.
But the Malaysian ringgit rose as domestic
financial markets were closed on Monday when its Asian peers
The Fed may trim its $85 billion monthly bond purchase
programme by $10 billion, according to a Reuters poll.
But such expectations have been reflected in to some degree,
traders and analysts said.
Emerging Asian currencies may rise as the Fed may maintain
interest rates low as relatively dovish Fed Vice Chair Janet
Yellen became the frontrunner for the U.S. central bank top
position after former Treasury Secretary Lawrence quit the race.
"I have removed my long dollar and short Asia positions.
After the Fed, the event risk is removed and we could get a
period of 'risk-on'," said Sean Yokota, head of Asia strategy at
Scandinavian bank SEB in Singapore.
Yokota expected regional currencies, especially the ringgit,
the baht and the Philippine peso, to appreciate.
Still, some traders saw potential risks if the Fed took a
more hawkish stance.
"It is still money off the table and we should see UST
yields moving higher," said a European bank trader in Manila,
referring to U.S. Treasuries.
"Higher yields will bring the U.S. equity market higher
also. This will bring the dollar firmer against most Asian FX."
The rupiah fell on dollar bids from local companies and as
forwards market pointed more weakness with its one-month
non-deliverable forwards to the dollar down to
But the Indonesian currency spot found some support from
demand from some foreign banks, while investors stayed wary of
possible intervention by the central bank, traders said.
The peso eased as investors covered dollar-short positions,
while its downside was limited as Manila shares
outperformed with a 0.x percent gain most regional peers.
The Philippine currency failed to extend gain as investors
were lined up to sell the Philippine currency on rallies,
especially around 43.700 per dollar.
Still, the peso may rebound if the Fed scales back its
stimulus just as much as expected, traders said.
"Tapering in the amount of $10-15 billion has already been
fully priced in," said a Philippine bank trader in Manila.
"If that happens, I see the dollar being sold on the news,"
The won slid as investors cut bullish bets on the currency
ahead of the Fed meeting and grew cautiious over possible
intervention by the foreign exchange authorities.
South Korean financial markets will be closed from Wednesday
to Friday for holidays.
Still, the currency found some relief as foreign investors
continued to buy Seoul shares.
"Even though intervention defends 1,080 level, I doubt how
further the won would weaken given stock inflows," said a senior
foreign bank trader in Seoul.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0430 GMT
Currency Latest bid Previous day Pct Move
Japan yen 99.22 99.06 -0.17
Sing dlr 1.2639 1.2627 -0.09
Taiwan dlr 29.653 29.721 +0.23
Korean won 1085.60 1082.20 -0.31
Baht 31.75 31.70 -0.16
Peso 43.76 43.61 -0.34
Rupiah 11458.00 11360.00 -0.86
Rupee 63.52 62.83 -1.09
Ringgit 3.2620 3.2900 +0.86
Yuan 6.1210 6.1203 -0.01
Change so far in 2013
Currency Latest bid End prev year Pct Move
Japan yen 99.22 86.79 -12.53
Sing dlr 1.2639 1.2219 -3.32
Taiwan dlr 29.653 29.136 -1.74
Korean won 1085.60 1070.60 -1.38
Baht 31.75 30.61 -3.59
Peso 43.76 41.05 -6.19
Rupiah 11458.00 9630.00 -15.95
Rupee 63.52 54.99 -13.43
Ringgit 3.2620 3.0580 -6.25
Yuan 6.1210 6.2303 +1.79
(Additional reporting by; Editing by Kim Coghill)
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