EM ASIA FX-Dollar weakness spurs rally, yuan NDFs jump

* Ringgit leads Asia higher as dollar loses ground

* One-year NDFs point to highest yuan rise since Aug. 2008

* Singapore dlr tracks euro but capped by intervention talk

* Thai baht gains after palace says king's conditions good

SINGAPORE, Oct 20 - The Malaysian ringgit led Asian currencies higher as the U.S. dollar lost ground globally, while the Chinese yuan jumped in offshore markets on optimism over the country's economic recovery.

The dollar fell to fresh lows for the year against a basket of currencies <.DXY> and hit a 14-month low against the euro <EUR=> as a cocktail of central bank comments fed into dollar-bearish sentiment. [ID:nT190263].

RINGGIT, SINGAPORE DOLLAR

The ringgit <MYR=> gained 0.6 percent to 3.354 per dollar, outperforming most Asian currencies, boosted by the euro's strength.

"The ringgit follows majors as the dollar is weakening against everybody," said a trader in Kuala Lumpur.

The Singapore dollar <SGD=> moved between 1.3888-1.3913/USD, torn between a firmer euro and fears of possible official intervention.

"A lot of U.S. dollar sellers above 1.3910, but the market worries about the authority's presence because Singapore dollar is very strong," said a Singapore-based trader.

Singapore dollar has gained 4 percent against the beleaguered U.S. currency since early September, fanning intervention fears as the currency is seen moving closer to the upper end of its secret trade-weighed band.

YUAN

Investors bid up Chinese yuan in NDFs <CNYNDFOR=> as the dollar lost ground globally while optimism about China's economic recovery boosted local stocks.

China will issue third-quarter gross domestic product growth figures and other economic data on Thursday, while economists polled by Reuters expect annual GDP growth to have accelerated to 8.9 percent in the third quarter. [ID:nPEK194184]

One-year dollar/yuan non-deliverable forwards hit a 14-month low at 6.5721, implying a 3.9 percent yuan rise from the spot -- the highest implied yuan rise since August 2008.

"We are still seeing good selling from 6- to 12-month tenors on higher euro and also expecting Chinese equities to go higher," said Singapore-based NDF trader.

A second trader cited U.S. dollar selling pressure across the NDF curve.

The spot yuan <CNY=CFXS>, which has been virtually pegged to the dollar since mid-2008, hovered near 6.83 per dollar.

Last week, the U.S. government criticised China for its lack of yuan flexibility, while stopping short of branding China a manipulator of its currency.

"We believe the balance of risks for the PBOC is shifting to inflation from growth, which we think increases the likelihood of Beijing acceding to pressure from Washington for more renminbi appreciation," Tim Condon, head of Asia research at ING, said in a note.

ING, while retaining its one-year yuan forecast at 6.62 per dollar, expects Beijing to widen the yuan's daily trading band to 3 percent from 0.5 percent within the next year.

BAHT

The baht <THB=> edged up to 33.28 per dollar in tandem with its regional peers, partly boosted by a statement from the royal palace that the Thai king's condition is good and he no long has fever. [ID:nSP343954]

But the baht later pulled back to 33.33 as traders cited possible dollar-buying intervention by the central bank. CURRENCIES VS U.S. DOLLAR Change on the day at 0542 GMT Currency Latest bid Previous day Pct Move Japan yen 90.12 90.58 +0.51 Sing dlr 1.3877 1.3899 +0.16 Taiwan dlr 32.261 32.325 +0.20 Korean won 1164.90 1171.00 +0.52 Baht 33.33 33.36 +0.09 Peso 46.50 46.67 +0.37 Rupiah 9370.00 9395.00 +0.27 Rupee 46.01 46.28 +0.59 Ringgit 3.3540 3.3730 +0.57 Yuan 6.8261 6.8267 +0.01 Change so far in 2009 Currency Latest bid End prev year Pct Move Japan yen 90.12 90.60 +0.53 Sing dlr 1.3877 1.4340 +3.34 Taiwan dlr 32.261 32.860 +1.86 Korean won 1164.90 1259.50 +8.12 Baht 33.33 34.80 +4.41 Peso 46.50 47.52 +2.19 Rupiah 9370.00 11000.00 +17.40 Rupee 46.01 48.71 +5.87 Ringgit 3.3540 3.4500 +2.86 Yuan 6.8261 6.8230 -0.05