EMERGING MARKETS-Malaysian ringgit, Thai baht lead steady Asian FX higher

* Thai baht eyes best day in a week * Malaysian ringgit eyes best day in 5 weeks * Dollar held off 10-month high * Asian stocks largely trading higher By Roushni Nair Sept 29 (Reuters) - Asian currencies rose on Friday in holiday-thinned trading, with the Malaysian ringgit and Thai baht leading gains in a tough week for the regional markets after hawkish U.S. Federal Reserve rhetoric and surging oil prices boosted the dollar. The ringgit strengthened by 0.5%, poised for its best session since August. It, however, has been logging losses for three straight quarters. The Philippine peso and the Indonesian rupiah followed suit, appreciating 0.2% each. The rupiah, however, is on track for its worst quarterly performance since June last year, losing more than 3% in value. Thailand's baht reversed early losses to gain for the first time this week, strengthening by 0.3%. The local unit is on track to post its fourth straight week of losses. But the currency has regained some lost ground after touching 10-month lows through the week. The baht has lost more than 3% in value this quarter. The baht would render some support from a weaker greenback over the medium term, as the U.S. economy might slowdown further with a high risk of economic recession by the end of this year or the first half of 2024, said Poon Panichpibool, a markets strategist with Krung Thai Bank. "Over medium to long-term I would like to maintain my previous call of gradually strong THB (baht) which I expect to be around 33.75-34.25 by the end of this year (revised weaker from previous forecasts of 32.80)," he said, adding that risks to forecasts could be rising oil prices which could derail disinflation process. Depreciation in the Thai currency is underpinned by concerns over a widening fiscal deficit due to higher spending by the country's new government, which took office last month and is advancing fresh policies to stimulate the economy. Surging fuel prices that touched new highs this week have stoked concerns about a higher import bill and persistent inflationary pressures in net oil importers such as Thailand and India. Markets in Taiwan, China, and South Korea were closed on account of public holidays. Asian markets now await key data points in the week ahead, including the Reserve Bank of India's monetary policy meeting on Oct. 6, and inflation numbers from Indonesia, the Philippines, and South Korea. The U.S. dollar index, which tracks the currency against six other majors, retreated about 0.1% and pulled further back from a 10-month high. However, it is on track for an 11th straight week of gains on expectations that the U.S. economy would remain more resilient to higher interest rates and a surge in oil prices. Shares in Southeast Asia were largely trading higher, with Singapore advancing 0.5%, while Indonesia and India surged 0.3% and 0.7%, respectively. Shares in the Philippines lost more than 1%. HIGHLIGHTS: ** Indonesian 10-year benchmark yield touches highest since late March at 6.91% ** Thai c.bank chief says rates pause appropriate 'for now' after surprise hike ** Philippines Sept inflation likely within 5.3%-6.1% range - c.bank Asia stock indexes and currencies at 0739 GMT COUNTRY FX RIC FX FX INDEX STOCKS STOCKS DAILY % YTD % DAILY YTD % % Japan +0.48 -11.7 -0.047 23.88 6 China India +0.18 -0.38 0.70 8.59 Indonesi +0.32 +0.65 0.28 1.55 a Malaysia +0.47 -6.06 -0.80 -4.48 Philippi +0.27 -1.54 -1.01 -3.73 nes S.Korea Singapor +0.37 -1.54 0.47 -0.90 e Taiwan - -4.83 - 15.67 Thailand +0.36 -4.99 0.10 -11.09 (Reporting by Roushni Nair in Bengaluru; Editing by Rashmi Aich)