EM ASIA FX-Rupee leads Asia FX higher on short-covering; further gains doubtful

Reuters

* Rupee jumps on hopes for Rajan

* Won, Taiwan dollar higher on inflows

* Ringgit, Philippine peso rise on short-covering

(Adds market action, updates prices)

By Jongwoo Cheon

SINGAPORE, Sept 5 (Reuters) - The Indian rupee jumped on

Thursday, leading gains among emerging Asian currencies, as

investors covered short positions in regional units with the

dollar off a six-week high ahead of a U.S. jobs data later this

week.

The rupee rallied as measures announced by the

central bank chief Raghuram Rajan late on Wednesday raised hopes

of a new approach to the current crisis, while the move to start

a discounted swap window for banks also aided.

The South Korean won and the Taiwan dollar

rose on fund inflows. The Philippine peso

and the Malaysian ringgit advanced as investors cut

short-term bearish bets.

However, most emerging Asian currencies, except the rupee,

gave up some of initial gains on sustained expectations that the

Federal Reserve may start scaling back its bond-buying programme

as early as this month.

U.S. automakers reported surprisingly solid August sales on

Wednesday, indicating the world's top economy appears to be

faring better in the third quarter than economists had feared.

The dollar index edged up to 82.218 in Asia trading

from Wednesday's 82.169. That compared with 82.516 hit on

Tuesday.

Investors' immediate focus is the U.S. ADP private-sector

job figures due later in the day, which have been seen as an

early glimpse into the more important official employment report

on Friday.

U.S. non-farm payrolls (NFP) were estimated to rise by

180,000 in August with the unemployment rate steady at 7.4

percent, according to a Reuters poll.

TAIWAN DOLLAR

The Taiwan dollar rose in heavy trading on inflows from

foreign financial institutions.

But its upside was limited as domestic importers bought U.S.

dollars around 29.700, traders said.

The central bank was suspected of intervening around

29.750, although its dollar purchases were not that big, traders

added. The authority was spotted intervening around that level

on Wednesday, a trader said.

The island's currency has a 200-day moving average at

29.708. The Taiwan dollar has been closing local trade weaker

than the average since May 10.

PHILIPPINE PESO

The peso rose on short-covering but traders hesitated to

take bullish positions on the Philippines currency, held back by

sustained caution ahead of U.S. jobs data.

Manila shares also shed 0.6 percent, underperforming

most regional equity markets.

Traders looked to buy dollar around its session low of 44.21

to the peso.

"I prefer long (dollar positions) to square," said a foreign

bank trader in Manila, for a target of 44.75 and 45.20.

"I am expecting NFP (nonfarm payrolls) to be strong since

the last data was lower than expected, despite the good numbers

from manufacturing. So I am expecting NFP to play catch-up," the

trader said.

RINGGIT

The ringgit edged higher as investors cut short-term bearish

positions when regional currencies gained. But offshore funds

sold the Malaysian currency on rallies, prompting interbank

speculators to reduce bullish bets, traders said.

Meanwhile, Malaysia's central bank is expected to keep its

key interest rate unchanged at 3.00 percent at a policy meeting

later in the day, a Reuters poll showed.

WON

The won rose as much as 0.5 percent to 1,089.3 per dollar,

its strongest since May 9, as foreign investors extended their

buying of shares.

The government also priced its 10-year dollar-denominated

government bonds overnight and reported healthy demand for the

debt, supporting views that the country's strong economic

fundamentals will likely prevent any exodus of foreign capital

when the Fed starts tapering its stimulus.

But the South Korean currency gave up some of initial gains

as investors cut long positions on sustained caution over

possible intervention by the foreign exchange authorities.

"The won's upside is limited as investors appeared to hold

long positions," said a South Korean 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 99.68 99.75 +0.07

Sing dlr 1.2753 1.2747 -0.05

Taiwan dlr 29.755 29.885 +0.44

Korean won 1092.10 1094.50 +0.22

Baht 32.16 32.20 +0.12

Peso 44.32 44.43 +0.24

Rupiah 11100.00 11100.00 +0.00

Rupee 65.86 67.07 +1.83

Ringgit 3.2770 3.2845 +0.23

Yuan 6.1192 6.1201 +0.01

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 99.68 86.79 -12.93

Sing dlr 1.2753 1.2219 -4.19

Taiwan dlr 29.755 29.136 -2.08

Korean won 1092.10 1070.60 -1.97

Baht 32.16 30.61 -4.82

Peso 44.32 41.05 -7.38

Rupiah 11100.00 9630.00 -13.24

Rupee 65.86 54.99 -16.50

Ringgit 3.2770 3.0580 -6.68

Yuan 6.1192 6.2303 +1.82

(Additional reporting by Jeanny Kao in TAIPEI, Yena Park in

SEOUL and IFR Markets' Catherine Tan; Editing by Eric Meijer)

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