Emerging FX-Asia weak as dollar gets respite before data

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SINGAPORE, Oct 3 (Reuters) The Philippine peso shed half a percent and other Asian currencies also weakened on Wednesday as market participants halted their selling of dollars while they waited for US economic data.

The US Institute of Supply Management's indicator on the service sector is due on Wednesday and non-farm jobs data is due on Friday.

Uncertainty about this data and what it will mean for U.S.

interest rates has helped the dollar rebound from record lows against the euro and a basket of major currencies this week.

In addition, Asian currencies have been undermined by fears regional central banks will intervene, forcing them to retreat from multi-month highs.

The peso hit 45.15 per dollar at its weakest point on Wednesday, losing half a percent from the previous close.

The Indonesian rupiah fell 0.2 percent to 9,110 per dollar and the Malaysian ringgit fell to 3.4095 per dollar.

Traders and analysts said they viewed the correction as temporary and would look to rebuild their long positions in some of the Asian currencies.

''Funds have been flowing into Asian equity markets,'' said Alvin Cheng, a trader at Fortis Bank in Hong Kong.

''Short-term, I like the Korean won and Singapore dollar.

But I hear more flows are coming into high-yielding currencies again, so the Indonesian rupiah will be my next favourite,'' he said.

Data from Nomura International showed India and Indonesia have seen a substantial recovery in foreign investment inflows after a slump during the credit market turmoil in August.

Since mid-August, Indonesia had received net foreign portfolio flows of 5 million, accounting for 0.9 percent of market capitalisation, Nomura said.

The Jakarta stock exchange index <.JKSE> hit a record high on Tuesday.

But while stock markets globally have continued to rise this week, currency markets have been beset with worries over what policy makers from the Group of Seven nations will decide when they meet in mid-October.

Comments from European officials against the strength of the euro have been partly responsible for tempering the dollar's fall.

However, JPMorgan Chase said in a note that investor unease with selling the dollar and concern over intervention in Asia would not last.

''We view these as temporary market adjustments to recent dollar/Asia declines.

''While investor caution could persist ahead of the U.S.

payrolls this Friday, we maintain our underlying bias for dollar/ringgit and U.S.dollar/Singapore dollar declines,'' JPMorgan said.

The Singapore dollar is off a 10-year high of 1.4738 per U.S. dollar struck on Monday. It has been boosted by a growing view that inflationary pressures will prompt the Monetary Authority of Singapore (MAS) to stick to a modest tightening stance when it reviews monetary policy next week.

The currency is the MAS's main policy tool.

''In the balance of risks to our call, we view risks as tilted to a more hawkish rather than dovish MAS. We accordingly remain biased to be long Singapore dollar,'' JPMorgan said.

CURRENCIES VS U.S. DOLLAR Change on the day at 0235 GMT Currency Latest bid Previous day Pct Move Japan yen 115.80 115.45 -0.30 Sing dlr 1.4809 1.4807 -0.01 Taiwan dlr 32.610 32.573 -0.11 Korean won 913.50 913.60 +0.01 Baht 34.22 34.24 +0.06 Peso 45.02 44.92 -0.23 Rupiah 9111.00 9090.00 -0.23 Rupee 39.85 39.85 +0.01 Ringgit 3.4105 3.4075 -0.09 Change so far in 2007 Currency Latest bid End prev year Pct Move Japan yen 115.80 119.01 +2.77 Sing dlr 1.4809 1.5337 +3.57 Taiwan dlr 32.610 32.585 -0.08 Korean won 913.50 929.50 +1.75 Baht 34.22 36.08 +5.44 Peso 45.02 49.03 +8.91 Rupiah 9111.00 8988.00 -1.35 Rupee 39.85 44.26 +11.07 Ringgit 3.4105 3.5270 +3.42 Yuan 7.5061 7.8051 +3.98 REUTERS sg ht0920

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