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Wednesday May 14, 4:33 PM Emerging FX-Singapore dollar, ringgit lead Asian decline SINGAPORE, May 14 (Reuters) - Asian currencies dropped against a broadly firmer dollar on Wednesday as investors rushed to cover their short dollar positions, with the Singapore dollar and Malaysian ringgit taking the hardest hits. The Malaysian ringgit was the top loser for the day, falling about 1.6 percent to 3.267 per dollar at one point. The Singapore dollar hit 1.3842 per U.S. dollar, down about 1 percent and its weakest level since early April. "Sentiment is likely to be affected by the dollar's rise versus the ringgit and Asian FX in general," said a trader. The Singapore dollar has lost 2.4 percent since it hit a record high of 1.3468 on April 23, but most analysts still expect it to resume its uptrend as the government tries to tame inflation. The Philippine peso fell as low as 42.85 per dollar, down about 0.4 percent from Tuesday's close and 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, including concern over the global credit crisis, a rebound in the dollar and rising oil prices. Oil prices 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. FIRM DOLLAR The dollar stayed firm against the yen and the euro 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. Elsewhere, the South Korean won fell 0.8 percent to 1,050.9 per dollar at one point, as rising crude prices boosted expectations that importers would have to pay more for oil. Some analysts believe the won, which has lost more than 10 percent versus the dollar so far this year to be Asia's worst performing currency, will probably weaken further in the near future. "There is a lot of blue sky above the U.S. dollar versus the won at the moment," Westpac currency strategist Sean Callow said in a note. Callow suggested that investors should go long on the U.S. dollar versus the won through one-month non-deliverable forwards to profit from the won's expected weakness in the near term. CURRENCIES VS U.S. DOLLAR Change on the day at 0736 GMT Currency Latest bid Previous day Pct Move Japan yen 105.02 103.64 -1.31 Sing dlr 1.3822 1.3671 -1.09 Taiwan dlr 30.983 30.873 -0.36 Korean won 1047.10 1042.10 -0.48 Baht 32.46 32.22 -0.74 Peso 42.75 42.66 -0.21 Rupiah 9292.00 9244.00 -0.52 Rupee 42.50 42.10 -0.94 Ringgit 3.2600 3.2140 -1.41 Yuan 6.9995 6.9889 -0.15 Change so far in 2008 Currency Latest bid End prev year Pct Move Japan yen 105.02 111.33 +6.01 Sing dlr 1.3822 1.4382 +4.05 Taiwan dlr 30.983 32.443 +4.71 Korean won 1047.10 935.70 -10.64 Baht 32.46 33.68 +3.76 Peso 42.75 41.28 -3.44 Rupiah 9292.00 9390.00 +1.05 Rupee 42.50 39.41 -7.27 Ringgit 3.2600 3.3050 +1.38 Yuan 6.9995 7.3041 +4.35 (Editing by Neil Fullick)