Emerging Asia FX-Thai baht just below 14-month high

SINGAPORE, Apr 7 (Reuters) The Thai baht held on Friday near 14-month peaks struck overnight as hopes of an end to Thailand's political crisis remained high following Thaksin Shinawatra's decision this week to step down as prime minister.

Most Asian currencies were little changed, but the South Korean won extended its gains to fresh 8-{ year highs at 949.9 per dollar and 8.0586 per yen .

The baht was quoted at 38.27/30 per dollar, up about a quarter of a percent from levels traded late in Asia on Wednesday. Thai financial markets were closed on Thursday for a holiday but the currency was traded in other financial centres.

In overnight deals the baht firmed as far as 38.13 per dollar, dealers said. That move took the currency to its strongest level since February 2005.

Dealers said that while the political outlook remained uncertain, Thaksin's decision to step down as prime minister on Wednesday had led to a feeling that political troubles may calm for now.

''The equity market has rallied and there has been foreign fund inflows,'' said Shahab Jalinoos, senior currency strategist at ABN AMRO in Singapore.

''There is not yet a resolution to the crisis but there is a feeling that the worst may be over, so that has led to a general buying of Thai assets.'' On Wednesday, foreign investors were net buyers of Thai stocks to the tune of about 0 million, pushing the key share index <.seti> to its highest level in more than two years.

''The market is focusing on who will be the next prime minister,'' said a trader in Bangkok. ''Yesterday the baht strengthened again against the dollar, but today we should hold in a narrow range.'' Elsewhere, markets scaled back expectations for a rise in European Central Bank interest rates next month after ECB President Jean-Claude Trichet on Thursday said the central bank did not share the market's view.

This pushed the dollar higher against major currencies and gave it a firmer tone against some Asian units.

CURRENCIES VS U.S. DOLLAR Change on the day at 0201 GMT Currency Latest bid Previous day Pct Move Japan yen 117.86 117.55 -0.26 Sing dlr 1.6054 1.6050 -0.02 Taiwan dlr 32.324 32.329 +0.02 Korean won 950.70 953.50 +0.29 Baht 38.25 38.37 +0.31 Peso 51.08 51.12 +0.08 Rupiah 9003.00 9000.00 -0.03 Ringgit 3.6690 3.6670 -0.05 Yuan 8.0120 8.0082 -0.05 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 117.86 117.96 +0.08 Sing dlr 1.6054 1.6625 +3.56 Taiwan dlr 32.324 32.850 +1.63 Korean won 950.70 1011.60 +6.41 Baht 38.25 41.11 +7.48 Peso 51.08 53.09 +3.94 Rupiah 9003.00 9835.00 +9.24 Ringgit 3.6690 3.7790 +3.00 Yuan 8.0120 8.0702 +0.73 ((Reporting by Dhara Ranasinghe, editing by Neil Fullick; Reuters Messaging: dhara.ranasinghe.reuters.comzreuters.net; +65 6870 3840)) REUTERS CS DS1214