Earlier, the Swiss National Bank (SNB) said it would broaden existing measures to counter a runaway Swiss franc by expanding bank deposits and that it would take further measures against the currency's strength if necessary.
The announcement dampened a brief recovery in the euro, which already was weakened by disappointment with the Franco-German summit, hitting emerging Asian currencies.
Persistent worries about the euro zone along with global economic slowdown are expected to keep putting pressure on emerging Asian units, analysts and dealers said.
"It's all economics now and we will continue to be dragged by euro zone politics into September. We still have a greatly uncertain environment," said Saktiandi Supaat, head of FX research at Maybank in Singapore.
Emerging Asian currencies will have some swings towards the end of the year in a weaker tone, he added.
On Tuesday, France and Germany unveiled far-reaching plans for closer euro zone integration, including deficit limits and biannual summits and said that joint euro zone bonds may be a longer-term option.
In recent weeks, emerging Asian units have wiped out some of gains made earlier on increasing worries about fiscal problems in the United States and the euro zone, as well as a slackening global economy.
Still, many dealers and analysts maintained their bullish views on regional currencies on continuous inflows into Asia.
"The market is selling on any rallies in USD/Asia and it can't climb at all," said a Kuala Lumpur based-dealer.
But Asian policymakers are unlikely to just wait and see as the inflows are expected to accelerate inflation, dealers and analysts said.
On Wednesday, Philippine central bank Governor Amando Tetangco told Reuters that it may consider tightening prudential limits sooner rather than later if market-based solutions to counter speculative inflows prove insufficient.
The won slid but then recovered much of its losses as exporters bought it for settlements and speculators dumped dollar positions to stop losses.
Exporters continued to show buying interest for the won especially around mid-1,070s per dollar, dealers said.
Earlier, interbank players added dollar positions on a softer euro and as China's central bank set the yuan's mid-point slightly weaker.
"USD/KRW is seen heading to 1,070 again as EUR is more resilient than expected. But I'm reluctant to sell it as we may see 1,080 again once EUR/USD breaks through 1.4350," said a foreign bank dealer in Seoul.
Technically, the South Korean currency has a resistance line at 1,067, around the 61.8 percent retracement of its depreciation early this month.
The Singapore dollar eased, but the city-state currency is seen testing its record high of 1.1993 against the US dollar.
The Singapore dollar weakened to as soft as 1.2050 versus the greenback, the last high of US dollar/Singapore dollar on hourly chart, once when the euro extended falls with the SNB's announcement.
But the city-state currency's weakness was capped at that level.
A break above 1.2090, the US dollar/Singapore dollar's low of August 11, would be a sign of short-term stabilisation.
Still, investors remain cautious over possible intervention by the Monetary Authority of Singapore (MAS) to defend the 1.2000 levels.
On Tuesday, the central bank was spotted in the market to keep the pair above the line, dealers said.
"1.20 is the top end of the SGD NEER band, so yes, they could be intervening there," says Thio Chin Loo, a currency strategist with BNP Paribas in Singapore.
So far this year, the Singapore dollar has been the best-performing emerging Asian currency with a 6.5 percent gain versus the US dollar as investors seek the Singapore currency in safe haven trades.
Meanwhile, the constant pressure being applied by Singapore dollar/ringgit cross on global financial crisis highs around 2.4800 could be a source of worry for the MAS. Resistance above this is at 2.5000-2.5050, which was tested during the turbulence last week.
The MAS is sure to resist a sustained move on this cross through 2.5000, as there are no meaningful resistance levels above this area.During the 1997-98 Asian financial crisis, the Singapore dollar/ringgit spiked to 2.60-2.70 levels.
Copyright Reuters, 2011