Emerging FX-Asia loses ground on dollar strength, oil prices

SINGAPORE, May 14 (Reuters) - Asian currencies fell against
a broadly stronger dollar on Wednesday as investors led by
hedge funds moved to cover their short dollar positions amid
jitters about record oil prices.

The Malaysian ringgit <MYR=> was the top loser in early
trade, falling almost 1 percent to 4.245 per dollar at one
point.

The Singapore dollar SGD fell as far as 1.3775 per U.S.
dollar, down three-quarters of a percent.

"The Singapore dollar <SGD=> is following other Asian
currencies generally," said a trader, adding that investors
bought the U.S. currency from 1.3735-60 to stop losses.

The Philippine peso <PHP=> hit as low as 42.84 per dollar,
down 0.4 percent from previous day's close, reaching its
weakest level since late November.

A trader in Manila said the Philippine central bank, or
BSP, was seen in the currency market selling dollars to support
the peso, which has lost 3.5 percent against the dollar so far
this year.

"I think the next target is 43 but the BSP factor should
also be considered as the BSP has the capability to stall any
upward pressure (on the dollar) when they want to," said the
trader.

Asian currencies have been weighed in recent weeks by a
combination of factors, heightened risk aversion amid a global
credit crisis, a rebound in the dollar and rising oil prices.

Oil prices CLc1 surged to a record near $127 per barrel
after OPEC producer Iran said it was studying a plan to cut
output.

"With the broad bullish dollar theme already underpinning
regional pairings, further squeeze was felt as funds were seen
covering short positions and establishing fresh longs in dollar
versus regionals," said Vishnu Varathan, an analyst at
FORECAST.

The dollar inched higher against the yen <JPY=> after
stronger-than-expected U.S. retail sales data on Tuesday
supported views that the Federal Reserve would keep interest
rates steady next month.

After a series of cuts the benchmark U.S. interest rate now
stands at 2 percent, lower than the policy rate in any emerging
Asian economy.

Market players are now waiting for the release of the U.S.
consumer price index later on Wednesday for further clues on
whether the Fed will hold rates steady at its next policy
meeting in June.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0302 GMT
Currency Latest bid Previous day Pct Move
Japan yen 104.62 103.64 -0.94
Sing dlr 1.3751 1.3671 -0.58
Taiwan dlr 30.976 30.873 -0.33
Korean won 1046.90 1042.10 -0.46
Baht 32.37 32.22 -0.46
Peso 42.78 42.66 -0.28
Rupiah 9285.00 9244.00 -0.44
Ringgit 3.2485 3.2140 -1.06
Yuan 6.9970 6.9889 -0.12
Change so far in 2008
Currency Latest bid End prev year Pct Move
Japan yen 104.62 111.33 +6.41
Sing dlr 1.3751 1.4382 +4.59
Taiwan dlr 30.976 32.443 +4.74
Korean won 1046.90 935.70 -10.62
Baht 32.37 33.68 +4.05
Peso 42.78 41.28 -3.51
Rupiah 9285.00 9390.00 +1.13
Rupee 42.10 39.41 -6.39
Ringgit 3.2485 3.3050 +1.74
Yuan 6.9970 7.3041 +4.39
(Reporting by Kevin Yao; Editing by Tomasz Janowski)