Emerging Asia FX-Inching higher as dollar retreats

SINGAPORE, June 27 (Reuters) Asian currencies nudged higher on Tuesday, recovering the previous day's falls as the dollar retreated against other major currencies.

They were also supported by comments published on Tuesday from a Chinese central bank (PBOC) official that countries should gradually rely less on the dollar for trade and their foreign exchange reserves.

But dealers said a significant rebound in Asian currencies was unlikely ahead of Thursday's U.S. interest rate decision.

The market is pricing in a quarter-point rise in the Federal Reserve's key rate to 5.25 percent, with some talk of a larger half-point increase.

''The recent shift has been for Fed fund expectations to be revised up even further and that has been supporting the dollar into this week,'' said Richard Yetsenga, a currency strategist at HSBC in Hong Kong.

''In the past 24 hours, we are seeing a bit of a reversal and this is probably technical more than anything else.

Although, there have been comments from the PBOC and that exacerbates the short-term dollar move that is already in place.'' The Singapore dollar was quoted at 1.5947 per U.S.

dollar, half a percent stronger than a two-month low hit on Monday at 1.6030 per dollar.

The Malaysian ringgit strengthened to 3.6750 per dollar, up more than half a percent from Monday's three-month low of 3.6950, while the South Korean won and Indonesian rupiah firmed about a fifth of a percent each.

The yen moved further away from a two-month low hit against the dollar last week , while hawkish comments on Monday from European Central Bank officials boosted the euro .

''Everything is following the weakness of the dollar against the yen at the moment,'' said a trader in Singapore. ''I don't think there is any clear direction at the moment.'' The Taiwan dollar rebounded from a six-month low hit on Monday. There was some caution, with Taiwan's parliament due to vote on Tuesday on a motion to oust President Chen Shui-bian over scandals involving family members, but he seemed likely to survive.

The Philippine peso underperformed its regional peers, slipping about a fifth of a percent to 53.42 per dollar -- close to last week's 5-1/2-month low of 53.48.

A Manila trader said expectations that Philippine interest rates would remain steady this week while U.S. interest rates rise, alongside worries about the country's fiscal position and political outlook, undermined the peso.

''If I rank them, I would put interest rate expectations first,'' he said. ''Second, would be the fiscal concerns in the Philippines and the third would be political concerns.'' Political opponents of Philippine President Gloria Macapagal Arroyo filed a new impeachment complaint on Monday, attempting to unseat her over allegations of corruption and human rights abuses.

CURRENCIES VS U.S. DOLLAR Change on the day at 0220 GMT Currency Latest bid Previous day Pct Move Japan yen 115.87 116.25 +0.33 Sing dlr 1.5945 1.6009 +0.40 Taiwan dlr 32.659 32.723 +0.20 Korean won 957.40 959.50 +0.22 Baht 38.41 38.47 +0.17 Peso 53.40 53.32 -0.15 Rupiah 9380.00 9408.00 +0.30 Rupee 46.38 46.39 +0.02 Ringgit 3.6760 3.6920 +0.44 Yuan 7.9990 8.0019 +0.04 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 115.87 117.96 +1.80 Sing dlr 1.5945 1.6625 +4.26 Taiwan dlr 32.659 32.850 +0.58 Korean won 957.40 1011.60 +5.66 Baht 38.41 41.11 +7.04 Peso 53.40 53.09 -0.58 Rupiah 9380.00 9835.00 +4.85 Rupee 46.38 45.04 -2.89 Ringgit 3.6760 3.7790 +2.80 Yuan 7.9990 8.0702 +0.89 REUTERS SY PC1020