Emerging FX-Asia's high-yielders retreat, but yuan jumps

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SINGAPORE, Nov 8 (Reuters) The Philippine peso and Indonesian rupiah fell on Thursday as investors trimmed their holdings of riskier assets following a slide in U.S. stocks, but the Chinese yuan rode higher on the dollar's weakness.

The high-yielding Indonesian rupiah fell as far as 9,165 per dollar, down nearly a half of a percent from late Asian trade on Wednesday.

The Philippine peso, another high-yielder in Asia, retreated to 43.60 per dollar, about 0.7 percent weaker than Wednesday's close.

A trader in Manila said he expected the peso sell off to be short term.

''It's a reaction to the drop in the Dow Jones (industrial average) last night -- a bit of risk aversion again,'' he said.

''I would say the peso will continue to be stronger against the dollar. I guess this is just a blip from the major trend,'' he said.

The Singapore dollar was thinly traded owing to a holiday.

Malaysia was also shut for a holiday.

The Dow Jones industrial average tumbled 2.6 percent on Wednesday on news of a probe of the U.S. home loan sector by New York's attorney general and after a U.S. savings/loans firm warned the housing downturn would extend well into next year.

MSCI's measure of Asia Pacific stocks excluding Japan was down 2 percent on Thursday.

The dollar hit a three-month low against the yen and remained under pressure against other currencies amid expectations that Federal Reserve would cut interest rate again next month.

The Chinese yuan hit a post-revaluation high of 7.4216 per dollar, almost 0.28 percent stronger than Wednesday's close at 7.4421.

Analysts said the yuan's rise reflected the dollar's weakness and the central bank's stance of guiding the currency steadily higher with two-way swings, to try to discourage speculation.

''This doesn't mean the dollar/yuan will drop 200 pips everyday, it's because of a weaker dollar,'' said a Singapore-based trader.

The yuan has gained about 1.4 percent versus the dollar since mid-October, bringing its cumulative rises so far this year to 5.16 percent, exceeding last year's annual rise of 3.4 percent.

The pace of appreciation is in line with market expectations.


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