Emerging FX-Asia inches higher against languid U.S. dlr

SINGAPORE, July 2 (Reuters) The Indonesian rupiah, Philippine peso and other Asian currencies furthered their rises on Monday against a dollar undermined by lacklustre trading ahead of a U.S. holiday and softer U.S. consumer inflation data.

But with oil prices up near a barrel and the widely held view that the U.S. dollar will eventually find support due to its yield advantage, the rally in the Asians was limited.

''We had the sell-off, then the recovery, now we seem to be range trading,'' said Callum Henderson, head of currency research at Standard Chartered Bank.

A surge in investors' appetite for risk buoyed the Asians earlier in June, before dovishness on U.S. rates leading into last week's Federal Reserve policy meeting hurt stock markets and currencies in Asia.

The rupiah rose to 8,985 per dollar, edging past the 9,000-per-dollar level struck last week. The peso gained 0.4 percent to hit 46.085 per dollar, still far from the 6-year peak of 45.58 it had struck early in June.

''I am surprised the dollar is not better bid, given the fears of a dovish FOMC statement. But bearish sentiment has been driven by the IMF report over the weekend, and market scepticism that the Fed won't need to cut by year-end,'' said Sue Trinh, a strategist at RBC Capital Markets.

The Fed left rates on hold last Thursday and said core inflation had eased a bit, boosting the view that overnight rates would remain at 5.25 percent for some time. Yet it said its primary concern was that inflation would fail to moderate as expected, surprising several dovish market players.

Meanwhile, the International Monetary Fund said on Friday the dollar share of total central bank's reserves in the first quarter of 2007 edged down to its lowest in at least a decade, although overall dollar reserves hit a new record.

U.S. markets are closed on July 4 for the Independence Day holiday.

In Asia, economists and traders await data on Indonesian inflation and South Korean consumer prices on Monday. Inflation data from the Philippines and Taiwan are also due later in the week.

Trinh said the rupiah and peso would remain bid as long as risk appetite was healthy. But some traders worry another rate cut in Indonesia, where rates have already been cut 12 times in about a year, would undermine the high-yielding currency.

CURRENCIES VS U.S. DOLLAR Change on the day at 0327 GMT Currency Latest bid Previous day Pct Move Japan yen 123.07 123.46 +0.32 Sing dlr 1.5277 1.5316 +0.26 Taiwan dlr 32.798 32.862 +0.20 Korean won 922.50 923.75 +0.14 Baht 34.50 34.51 +0.03 Peso 46.08 46.24 +0.35 Rupiah 8995.00 9040.00 +0.50 Rupee 40.72 40.74 +0.05 Ringgit 3.4500 3.4495 -0.01 Yuan 7.6061 7.6166 +0.14 Change so far in 2007 Currency Latest bid End prev year Pct Move Japan yen 123.07 119.01 -3.30 Sing dlr 1.5277 1.5337 +0.39 Taiwan dlr 32.798 32.585 -0.65 Korean won 922.50 0929.50 +0.76 Baht 34.50 36.08 +4.58 Peso 46.08 49.03 +6.40 Rupiah 8995.00 8988.00 -0.08 Rupee 40.72 44.26 +8.68 Ringgit 3.4500 3.5270 +2.23 Yuan 7.6061 7.8051 +2.62 REUTERS SKB KP0854