EM ASIA FX-U.S. jobs, China exports support Asia FX; Fed views cap gains

Reuters

* Won hits 4-month high on foreigners' stock buying

* Taiwan dollar gains on foreign financial inflows

* Ringgit, Philippine peso higher on short-covering

(Adds text, updates prices)

By Jongwoo Cheon

SINGAPORE, Sept 9 (Reuters) - Most emerging Asian currencies

rose on Monday as investors covered short positions after

lukewarm U.S. job data and stronger-than-expected China exports

that lifted regional stocks.

The South Korean won hit a four-month high on

sustained stock inflows, while the Taiwan dollar

outperformed regional peers thanks to demand from foreign

financial institutions.

The Malaysian ringgit and the Philippine peso

advanced as investors cut bearish positions.

U.S. employers in August hired fewer people than expected,

sparking views that the Federal Reserve will still cut its

stimulus this month, but by less than earlier anticipated.

China's exports grew more than forecast last month in

another sign of stabilisation in the world's second-largest

economy.

Still, emerging Asian currencies are unlikely to appreciate

further as long as investors maintain expectations that the Fed

may dial down its quantitative easing, analysts and traders

said.

"The weak jobs data hasn't changed expectations for the Fed

to start tapering soon," said Frances Cheung, Credit Agricole

CIB's senior strategist in Hong Kong.

"There is scope for renewed weakness in the coming weeks,

before a rebound some time in the fourth quarter," Cheung added,

when asked if emerging Asian currencies would fall further.

Most U.S. primary dealers expect the Fed, at its policy

meeting on Sept. 17-18, will cut the size of its bond

purchases, according to a Reuters poll.

"Asia will see more weakness heading into the Fed meeting,"

said Sean Yokota, head of Asia strategy at Scandinavian bank SEB

in Singapore.

"At this stage, Fed is the dominant factor since it is at

the very beginning of the cyclical recovery in Asia and the

positive outlook still has risks whereas the impact of Fed

tapering carries more certainty."

The South Korean won has bucked the recent trend of

depreciation among emerging Asian currencies as investors chased

the country's assets due to economic and fiscal fundamentals

that are stronger than others in Asia.

However, Yokota said the won is likely to track regional

weakness eventually.

WON

The won rose as much as 1,087.3 per dollar, its strongest

since May 9, as foreign investors extended a buying spree to a

12th consecutive session.

Foreign investors have bought a combined net 3.4 trillion

won ($3.1 billion) in Seoul's main stock market,

according to Korea Exchange data.

Still, lingering caution over possible intervention by

foreign exchange authorities limited the won's upside. Importers

also bought dollars on dips, traders said.

"The won stays on an appreciation trend and may head to

1,080," said a senior foreign bank trader in Seoul.

"But exporters are likely to wait for better levels to buy

amid intervention risks," he added.

The South Korean currency is seen facing chart resistance at

1,083.0, the high of May 9. The next resistance stands at

1,080.2, the 76.4 percent Fibonacci retracement of its

depreciation from January through June.

TAIWAN DOLLAR

The Taiwan dollar advanced on inflows from foreign financial

institutions and as exporters lined up to buy it for settlements

around 29.800 to the U.S. dollar.

But the central bank was spotted intervening to stem its

appreciation, traders said.

Domestic importers also purchased the greenback around

29.730, according to traders.

RINGGIT

The ringgit gained as three- and five-year government bond

yields fell.

Investors, however, hesitated to buy the currency on

sustained concerns over the Fed's reduction in stimulus and

Malaysia's fiscal deficit.

A senior Malaysian bank trader in Kuala Lumpur said the

ringgit is unlikely to strengthen past 3.3000 per dollar and he

would sell the ringgit around the level for 3.3400.

"Market is focusing on Southeast Asia due to structural

problems with twin-deficits," the trader said.

"Malaysia still sees trade and current account surpluses,

but they are deteriorating," he added.

PHILIPPINE PESO

The peso started the local trade at 44.25 per dollar, but

investors sold the Philippine currency from the session high.

It is expected to stay under pressure from local companies'

mid-month dollar demand, traders said. The Fed is still seen

scaling back its bond-buying programme, they added.

"The Fed tapering is still the talk," said a foreign bank

trader in Manila.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0430 GMT

Currency Latest bid Previous day Pct Move

Japan yen 99.69 99.13 -0.56

Sing dlr 1.2748 1.2737 -0.09

Taiwan dlr 29.736 29.900 +0.55

Korean won 1088.30 1093.00 +0.43

Baht 32.27 32.39 +0.37

Peso 44.39 44.48 +0.21

Rupiah 11170.00 11150.00 -0.18

*Rupee 65.24 65.24 -0.00

Ringgit 3.3125 3.3285 +0.48

Yuan 6.1166 6.1205 +0.06

Change so far in 2013

Currency Latest bid End prev year Pct Move

Japan yen 99.69 86.79 -12.94

Sing dlr 1.2748 1.2219 -4.15

Taiwan dlr 29.736 29.136 -2.02

Korean won 1088.30 1070.60 -1.63

Baht 32.27 30.61 -5.14

Peso 44.39 41.05 -7.51

Rupiah 11170.00 9630.00 -13.79

Rupee 65.24 54.99 -15.71

Ringgit 3.3125 3.0580 -7.68

Yuan 6.1166 6.2303 +1.86

* Financial markets in India are closed for a holiday.

(Additional reporting by Lin Miao-jung in TAIPEI; Editing by

Richard Borsuk)

View Comments