Emerging FX-Rising yuan in focus after strong growth data

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SINGAPORE, Oct 25 (Reuters) The yuan rose to a post-revaluation high on Thursday after data showed economic growth in China remained robust, while weak investor risk appetite constrained other Asian currencies.

The dollar fell broadly and the Japanese yen rose to levels near 114 per dollar after losses at Merrill Lynch&Co. and a tumble in U.S. existing home sales to a record low last month raised concerns about U.S. economic growth.

Expectations of another U.S. rate cut pushed up some Asian stock markets. But falling risk appetite weighed on the high-yielding Indonesian rupiah, taking it down nearly half a percent to 9,170 per dollar.

The Singapore dollar moved to the firmer side of 1.46 per dollar, but gained just 0.1 percent.

Meanwhile, the yuan hit 7.4834 per dollar, its highest since the currency was revalued in July 2005.

Thursday's data showed the economy expanded at a scorching annual rate of 11.5 percent in the first three quarters of this year, and urban property prices continued to climb at a sharp pace.

Speculation that China will allow the yuan to rise more quickly has intensified since officials from the Group of Seven nations made a strong call at the weekend for faster appreciation of the yuan's effective exchange rate.

Craig Chan, a strategist at Lehman Brothers, said he had been worried last week about how much appreciation markets were pricing in, but now expected a pick-up in the yuan's rise.

''Overall outright dollar/yuan is going to be falling because of the movement in spot,'' he said.

''That is supported by all local factors and the soft dollar as well,'' he said, citing the strength in economic data, hawkish comments from Chinese policy makers and the relatively high inflation levels.

The yuan has so far gained 8.4 percent against the dollar since being revalued and allowed to float in a narrow band in July 2005. It has however weakened considerably against the euro and is generally estimated to be undervalued in trade-weighted terms.

One-year non-deliverable forwards priced the yuan at 7.0010 per dollar, nearly a 7 percent appreciation in 12 months.

On Wednesday, media quoted an in-house report by the National Development and Reform Commission as suggesting China should consider a one-off 15-20 percent yuan revaluation, although the NDRC denied the existence of the report.

Still, remarks by Premier Wen Jiabao on Wednesday that China will keep a tight grip on economic policy for the rest of the year to hold down investment growth and inflation, fuelled speculation that besides raising interest rates the authorities might encourage rises in the tightly managed yuan.

CURRENCIES VS U.S. DOLLAR Change on the day at 0324 GMT Currency Latest bid Previous day Pct Move Japan yen 114.04 114.76 +0.63 Sing dlr 1.4598 1.4616 +0.12 Taiwan dlr 32.506 32.559 +0.16 Korean won 917.50 916.80 -0.08 Baht 34.13 34.16 +0.09 Peso 44.05 44.28 +0.52 Rupiah 9165.00 9127.00 -0.41 Rupee 39.58 39.58 +0.00 Ringgit 3.3630 3.3680 +0.15 Yuan 7.4850 7.4937 +0.12 Change so far in 2007 Currency Latest bid End prev year Pct Move Japan yen 114.04 119.01 +4.36 Sing dlr 1.4598 1.5337 +5.06 Taiwan dlr 32.506 32.585 +0.24 Korean won 917.50 929.50 +1.31 Baht 34.13 36.08 +5.71 Peso 44.05 49.03 +11.31 Rupiah 9165.00 8988.00 -1.93 Rupee 39.58 44.26 +11.81 Ringgit 3.3630 3.5270 +4.88 Yuan 7.4850 7.8051 +4.28 REUTERS SKB HS0946

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