EM ASIA FX-Rupiah dips with stocks, ringgit NDF curve stays flat

* Rupiah falls 1 pct as foreign investors dump local assets

* Ringgit weaker, NDF curve stays flat ahead of Fed meeting

Kevin Yao

SINGAPORE, Nov 2 (Reuters) - The Indonesian rupiah and
Malaysian ringgit slipped on Monday as falling stocks spurred
by the failure of U.S. lender CIT Group encouraged investors to
unwind their short dollar bets.

The Australian and New Zealand dollars also fell early in
the session partly due to a correction to their rallies of the
past few months and soured market sentiment from news that CIT
Group CIT.N filed for bankruptcy. [ID:nN01408863]

Signalling market jitters, Wall Street's favourite pulse of
investor sentiment, the Chicago Board Options Exchange
Volatility Index .VIX, or VIX, rocketed 23.95 percent higher
to 30.69 on Friday, the highest level since July.

The Philippine market was shut for holiday.

RUPIAH

The Indonesian rupiah IDR= fell as much as 1 percent to
9,630 per dollar as hedge funds and other offshore investors
sold local stocks and central bank debt.

Jakarta shares .JKSE lost 1.5 percent at 0541 GMT.

"SBI (central bank debt) is the most liquid asset but
offshore dollar demand now is via stocks," said a Jakarta-based
trader. "Government bonds are not very liquid -- when investors
want to sell bonds to take profits, buyers are not available in
the market."

Investors are waiting for inflation data, due later on
Monday. It is the last reading before a policy review on
Wednesday when the central bank is expected to keep interest
rates on hold. [ID:nJAK494474]

The offshore forward market was rangebound, with
three-month dollar/rupiah NDFs IDR1MNDFOR= hovering around
9,705, implying a 1 percent rupiah fall from the spot rate
compared to 1.8 percent on Friday.

"I don't see much activity and the NDF curve remains the
same as last Friday," said a Singapore-based trader.

RINGGIT

The ringgit MYR= shed 0.8 percent to 3.4365 per dollar.

"Dollar is bid all around due to the equity crash last
Friday," said a Kuala Lumpur-based trader, referring to sharp
falls in stocks on Wall Street. [ID:nN30437359]

Meanwhile, three-month dollar/ringgit NDFs MYR3MNDFOR=
rose to 3.4365, implying little change from the spot rate.

CIMB strategist Suresh Ramanathan said any hawkish tone
from the U.S. Federal Reserve at this week's policy meeting
will indicate a higher dollar LIBOR rate on NDF implied yields.

"The market may need spot dollar/ringgit to be reflective
of further gains to cover the potential rise in funding costs
in these trades," he said. "As the NDF curve stays flat, my
guess is probably the market is still giving more weight to the
Fed factor rather than jumping into the CIT news."

The Fed is widely expected to keep its benchmark interest
rate near zero even though the U.S. economy may have turned a
corner after the deepest recession in some 70 years.
[ID:nN01437140]
CURRENCIES VS U.S. DOLLAR
Change on the day at 0542 GMT
Currency Latest bid Previous day Pct Move
Japan yen 90.00 90.08 +0.09
Sing dlr 1.3988 1.4024 +0.26
Taiwan dlr 32.560 32.535 -0.08
Korean won 1182.30 1182.50 +0.02
Baht 33.43 33.41 -0.06
Rupiah 9590.00 9540.00 -0.52
Rupee 46.96 46.96 +0.00
Ringgit 3.4275 3.4100 -0.51
Yuan 6.8277 6.8275 -0.00
Change so far in 2009
Currency Latest bid End prev year Pct Move
Japan yen 90.00 90.60 +0.67
Sing dlr 1.3988 1.4340 +2.52
Taiwan dlr 32.560 32.860 +0.92
Korean won 1182.30 1259.50 +6.53
Baht 33.43 34.80 +4.10
Peso 47.63 47.52 -0.23
Rupiah 9590.00 11000.00 +14.70
Rupee 46.96 48.71 +3.73
Ringgit 3.4275 3.4500 +0.66
Yuan 6.8277 6.8230 -0.07
(Reporting by Kevin Yao; Editing by Neil Fullick)