December 31, 2013 / 3:37 AM / 4 years ago

EM ASIA FX-Taiwan dlr near 2-week high; Asia FX set to see 2013 losses

* Taiwan dollar up on yuan proxy trades, exporters, inflows
    * Rupiah loses 21.0 pct vs dlr in 2013; rupee down 11.2 pct
    * Yuan gains 3.0 pct; won rises 1.4 pct

 (Adds text, updates prices)
    By Jongwoo Cheon
    SEOUL, Dec 31 (Reuters) - The Taiwan dollar hit a near
two-week high on a record yuan, leading gains in emerging Asian
currencies on Tuesday, but most regional units were on the
course for annual losses as the U.S. Federal Reserve plans to
start cutting its stimulus.
    The Taiwan dollar rose as investors bought it for
proxy trades to bet on a stronger yuan.
    The renminbi earlier hit a record high after China's central
bank fixed the currency's mid-point to the dollar at its highest
since the landmark revaluation in 2005. 
    Malaysia's ringgit advanced as investors covered
short positions in thin trading before the year end.
    Still, most emerging Asian currencies were set to suffer
losses in 2013 and their outlook stayed bleak as the Fed
announced it would scale back its bond-buying programme, traders
and analysts said.
    "I expect EM Asia to come under further selling pressure
from time to time on the back of the Fed tapering," said Sim Moh
Siong, FX strategist for Bank of Singapore.
    "But the worst of the sell-off seems behind us," Sim said.
    The Indonesian rupiah and Indian rupee are
likely to stay most vulnerable, while the South Korean won
, the Singapore dollar and the Taiwan dollar
should remain resilient, he added.
    The rupiah and the rupee led slides among emerging Asian
currencies in 2013, according to Thomson Reuters data.
    The Indonesian currency has lost 21.0 percent against the
dollar as it is regarded as the Asian currency most vulnerable
to capital outflows on the Fed's policy shift because of the
Southeast Asian country's current account deficit.
    The rupee has fallen 11.2 percent on weak economic growth
and high inflation.
    The Philippine peso slid 7.5 percent, while
Thailand's baht fell 6.9 percent. The ringgit has been
down 6.8 percent.
    But the yuan and the South Korean won bucked the
trend. The Chinese currency has gained 3.0 percent, becoming the
best-performing Asian currency of the year.
    The won rose 1.4 percent in the local market on current
account surplus and as some investors saw the country's assets
safer than ones in other emerging Asian countries.
    
    TAIWAN DOLLAR
    The Taiwan dollar rose as much as 0.9 percent to 29.765 to
the U.S. dollar, its strongest level since Dec. 19.
    Demand from local exporters and foreign financial
institutions supported the island's currency, traders said.
    The central bank, however, was spotted buying the U.S.
dollar around 29.800 to limit the Taiwan dollar's upside,
traders said.
    
    RINGGIT
    The ringgit gained, but currency investors have barely
reacted so far to Malaysian Prime Minister's new measures to cut
public spending, traders said.
    Prime Minister Nazib Razak has announced new 11 steps, state
news agency Bernama reported, as the country is under pressure
to rein in spending and boost tax collection to tackle its high
budget deficit. 
                    
    CURRENCIES VS U.S. DOLLAR
    Change on the day at 0315 GMT
  Currency    Latest bid   Previous day    Pct Move
 *Japan yen       104.88         105.15       +0.26
  Sing dlr        1.2655         1.2675       +0.16
  Taiwan dlr      29.790         30.030       +0.81
 *Korean won     1055.25        1055.40       +0.01
 *Baht             32.87          32.86       -0.03
 *Peso             44.40          44.40        0.00
  Rupiah        12185.00       12200.00       +0.12
  Rupee            61.91          61.91        0.00
  Ringgit         3.2810         3.2945       +0.41
  Yuan            6.0520         6.0618       +0.16
 
  Change so far in 2013
  Currency    Latest bid  End prev year    Pct Move
  Japan yen       104.88          86.79      -17.25
  Sing dlr        1.2655         1.2219       -3.45
  Taiwan dlr      29.790         29.136       -2.20
  Korean won     1055.25        1070.60       +1.45
  Baht             32.87          30.61       -6.88
  Peso             44.40          41.05       -7.53
  Rupiah        12185.00        9630.00      -20.97
  Rupee            61.91          54.99      -11.18
  Ringgit         3.2810         3.0580       -6.80
  Yuan            6.0520         6.2303       +2.95
 * Financial markets in Japan, the Philippines, South Korea and
Thailand are closed for a holiday.

 (Additional reporting by Roger Tung in TAIPEI; Editing by
Gopakumar Warrier)

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