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EM ASIA FX-Most Asia FX gains on U.S. debt-ceiling deal

* 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

Kuala Lumpur.

"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.


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)