Asian currencies declined on Wednesday as sentiment was hit after US President Donald trump pulled the country out of an international nuclear deal with Iran, triggering a rally in oil prices in a negative sign for net oil importers in the region. Oil prices rose more than 2 percent to over a three-year high at $76.65 per barrel, as Trump's move is seen as likely curbing Opec-member's crude exports in an already tight market. Iran is the third biggest exporter of crude within Opec.
The United States plans to impose new unilateral sanctions after abandoning the agreement, which limited Iran's nuclear ambitions in exchange for removing joint US-Europe sanctions.
Currencies of Asian nations that are net importers of oil such as the Indian rupee, Indonesian rupiah and the Philippine peso, were down between 0.1 and 0.4 percent.
The rise in US Treasury yields on safe-haven buying also saw interest moving away from Asia currencies. The 10-year Treasury yield hit a weekly high of 2.987 percent.
There was no noticeable impact on the Philippine peso from data on Wednesday showing the trade deficit for March narrowed as imports slowed. Exports for the month declined 8.2 percent from a year ago.
"The decline in trade deficit was on account of drop in exports," said Manny Cruz, analyst at Asiasec Equities Inc, adding that the Philippine economy is not highly dependent on exports.
Indonesian rupiah extended losses to a third day to 14,085 against the dollar, hitting near 2-1/2 year lows. The Thai baht led losses in the region with a 0.6 percent drop - the biggest daily loss in four months.
Financial markets in Malaysia were closed on Wednesday for the country's general elections which pits current Prime Minister Najib Razak against his mentor Mahathir Mohamad.
The election results are due later in the day, and analysts expect the ringgit to be hit by anything other than a win by the ruling Barisan Nasional Alliance.
The Indian rupee fell to 67.42 against the dollar on Wednesday, its lowest since February 2017, declining 0.4 percent.
Investors will be awaiting results for Saturday's election in the state of Karnataka expected next week.
Karnataka state, home to India's Silicon Valley capital of Bengaluru, is the first big state electing an assembly this year to be followed by three others in the final test of popularity for Prime Minister Narendra Modi before a general election due next May.
"With elections looming, the Reserve Bank of India may also have to act proactively to temper bond and forex market volatility through various interventions, beyond regular forex intervention. We expect tightening risks to remain on the table," DBS said in note.
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