Emerging Asia FX-Peso at 4-yr high, others steady

SINGAPORE, Sep 19 (Reuters) The Philippine peso hit a four-year high on Tuesday, while other Asian currencies were steady as markets look ahead to a U.S. Federal Reserve meeting this week.

Extending a three-month rally, the peso opened at 50.06 against the U.S. dollar in local trade, buoyed by positive economic data and remittances from Filipinos working overseas.

''There's a chance the central bank might intervene but the market might test 50,'' a Manila-based trader said. The peso last traded at 50 per dollar in June 2002.

The Philippine government on Monday reported a budget surplus for August, its fourth monthly surplus this year, sparking a rally in financial markets on expectations the administration is reducing its budget deficit.

The Taiwan dollar and the Thai baht were little changed, trading around 32.915/918 and 37.310/340 per U.S. dollar, respectively.

But the Singapore dollar slipped a tenth of a percent to around 1.5885/5890 per U.S. dollar as markets speculate that the Monetary Authority of Singapore (MAS) might loosen policy.

The Singapore dollar has fallen nearly 1 percent since September 7.

The MAS, which uses the currency as its main policy tool, currently allows a modest and gradual appreciation in the Singapore dollar.

But analysts say it might adopt a more neutral stance when it next reviews policy in October as the U.S. Federal Reserve pauses its rate-raising cycle and Singapore economic growth slows.

''Moderating global and domestic data are lessening market conviction to the continued MAS tightening view,'' JP Morgan said in a note.

The Japanese yen was trading around 117.90/93 against the dollar, near five-months of 118.29 hit on Monday.

''People are lightening up because I think the Street is still short dollars and long Asians. So we're just squaring our positions,'' a Singapore-based trader said.

He said the market would await the statement of the Federal Open Market Committee on Wednesday to seek currency direction.

The Fed is widely expected to keep its funds rate at 5.25 percent but it may indicate it is keeping its options open to raising rates again if inflation remains high.

Focus was also on the maiden visit of Henry Paulson as U.S.

Treasury Secretary to China this week.

''The Chinese yuan will remain in focus despite the G7 proving even more of an anti-climax than we had expected,'' ABN AMRO Bank said in a note.

China has said it would stick to its policy of letting its currency rise gradually despite calls from the G7 for greater exchange rate flexibility among emerging economies.

The Chinese central bank set Tuesday's mid-point against the dollar at 7.9342, its highest since the currency was revalued in July last year.

REUTERS LL HS1003