Emerging FX-Asia pauses, China diversification talk fades

SINGAPORE, Nov 14 (Reuters) Most Asian currencies were little changed against the dollar on Tuesday, steadying after recent gains fanned by last week's comments on China's diversifying of its $1 trillion in foreign exchange reserves.

The South Korean won hovered around 938 per dollar at 0303 GMT, down almost a third of a percent amid concerns about dollar-buying intervention by the authorities after it hit a six-month high of 927.8 on Monday.

The Taiwan dollar fell marginally to around 32.84 per U.S. dollar from Monday's close while the Singapore dollar was steady around 1.5560 per U.S. dollar, off its nine-year high of 1.5545 struck late on Friday.

Charlie Lay, a currency strategist at Credit Suisse, said investors had turned cautious after the recent gains in Asian currencies, fuelled by the dollar's weakness against the euro and yen after People's Bank of China Governor Zhou Xiaochuan said Beijing planned to diversify its massive currency reserves.

''It's nothing new for the market because they have been doing this for years and this will not herald a dollar collapse,'' he said.

Most analysts felt the reaction to the comments was overdone, but investors still used it as an excuse to sell the U.S. dollar.

The Thai baht stood out, going as high as 36.36 per dollar on Tuesday, its strongest level in nearly eight years. It has been boosted by recent flows into the stock market, but Lay said it might pull back in the near term.

CURRENCIES VS U.S. DOLLAR Change on the day at 0303 GMT Currency Latest bid Previous day Pct Move Japan yen 117.64 117.45 -0.16 Sing dlr 1.5565 1.5569 +0.03 Taiwan dlr 32.761 32.736 -0.08 Korean won 937.60 934.90 -0.29 Baht 36.42 36.50 +0.22 Peso 49.78 49.76 -0.04 Rupiah 9127.00 9125.00 -0.02 Rupee 44.97 44.97 +0.00 Ringgit 3.6385 3.6350 -0.10 Yuan 7.8693 7.8667 -0.03 Change so far in 2006 Currency Latest bid End prev year Pct Move Japan yen 117.64 117.96 +0.27 Sing dlr 1.5565 1.6625 +6.81 Taiwan dlr 32.761 32.850 +0.27 Korean won 937.60 1011.60 +7.89 Baht 36.42 41.11 +12.88 Peso 49.78 53.09 +6.65 Rupiah 9127.00 9835.00 +7.76 Rupee 44.97 45.04 +0.16 Ringgit 3.6385 3.7790 +3.86 Yuan 7.8693 8.0702 +2.55 REUTERS BDP ND0952