Emerging FX-Asia spikes higher on broad US dlr weakness

SINGAPORE, Nov 29 (Reuters) Asian currencies spiked to multi-month highs on Wednesday, boosted by the U.S. dollar's persistent broad weakness driven by softer economic data and the view the Federal Reserve may cut rates next year.

The yen's 0.4 percent rally to levels around 115.60 per dollar after surprisingly strong Japanese industrial production data also underpinned regional currencies.

The Singapore dollar rose 0.4 percent to a nine-year high of 1.5457 per U.S. dollar.

The South Korean won hovered around 928 per dollar, wary of approaching Monday's highs near 925 after several warnings by the authorities about the currency's rapid ascent in the past week.

The Thai baht was among the biggest gainers, climbing 0.6 percent to a 7-1/2-year high around 36.16 per dollar.

''The dollar is falling everywhere, that's why,'' said a Bangkok-based trader, referring to the baht's rise.

''They may wait,'' he said, when asked if the Bank of Thailand is expected to intervene to cap the baht.

The dollar's fall to a 20-month low against the euro was merely an extension of its general downtrend since the middle of November and spurred by unexpected softness in October U.S. durable goods orders. Fed Chairman Ben Bernanke's remarks about ''uncomfortably high'' core inflation did little to cheer the dollar.

The Bank of Thailand said on Monday the baht had risen too fast and it would ask the finance ministry to allow exporters to hold their overseas receipts for up to 15 days instead of the 7-day limit now in place. The baht has risen about 1.3 percent in the past 8 sessions.

But analysts said the baht's strong correlation with the yen, because of Thailand's heavy trade with Japan, will keep the pressure on the baht to appreciate and such a ruling on export receipts would only slow the pace rather than reverse the trend.

RISK Meanwhile, some analysts worried that alongside a broad U.S.

dollar downtrend was a rise in risk aversion, meaning risky assets such as the Indonesian rupiah and Philippine peso could be in for some losses.

''While for now the view of emerging generalised U.S. dollar weakness is gaining momentum, there remains little evidence to suggest that the unwinding of carry trades is back,'' UBS said in a note to clients.

''However, worries about the latter are increasing given the rise in risk aversion.'' UBS cited the steep rise in the VIX, which is the Chicago Board Options Exchange Volatility Index and a widely used measure of risk.

The VIX rose from a low of 9.8 last week to 12.55 overnight. UBS said it was wary of being long the rupiah, peso and the Indian rupee.

''We do not fancy the three currencies above, especially the rupee, given its high current account deficit and the large foreign exposure in the equity market in recent weeks, and the peso, given its high beta to risk,'' UBS wrote. CURRENCIES VS U.S. DOLLAR REUTERS AKJ KP0918