SINGAPORE: Most emerging Asian currencies fell on Friday to see weekly losses as US President Barack Obama's authorisation of air strikes in Iraq dampened risk sentiment, while regional units recovered parts of slides after strong Chinese trade data.
Earlier, Obama said he has approved air strikes against Islamist militants in Iraq to protect American personnel and launched humanitarian assistance to prevent a genocide of members of a religious minority who have fled their homes.
That boosted risk aversion, which has been already strong due to geopolitical tensions over Ukraine, pushing Asian stocks lower.
Offshore funds dumped emerging Asian currencies such as the South Korean won and the Philippine peso.
Obama's step also lifted oil prices, increasing concerns over current account balances in Asia as many of regional countries heavily depend on imports to meet oil demand.
"Asian currencies are inevitably going to see more weakness for the time being on surging geopolitical risks," said Jeong My-young, Samsung Futures research head in Seoul.
"The risks are enough to cause more profit-taking as market volatility will rebound," Jeong added.
Emerging Asian currencies, however, pared some of earlier losses after data showing China's exports in July jumped 14.5 percent, nearly double the increase that had been anticipated.
Some analysts expected China's improving economy to help regional currencies, especially those in Northeast Asia, weather global risk aversion.
"Export performance continues to improve, in particular in North Asia. Current accounts remain healthy as a result," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore.
Southeast Asian currencies have led weekly slides in regional units.
So far this week, the peso has fallen 1.1 percent against the dollar on growing concerns over slower growth as the World Bank cut the Philippine's growth forecasts.
The Indian rupee has skidded 0.8 percent, while the Singapore dollar has slid 0.7 percent. The rupiah has eased 0.3 percent.
Those losses compared to a 0.1 percent weekly depreciation in the won.
China's yuan has bucked against the trend as the central bank signalled it was comfortable with the stronger levels as the economy was improving. The yuan has gained 0.4 percent, set to enjoy its third consecutive week of appreciation.
PHILIPPINE PESO
The peso fell up to 0.5 percent to 44.280 per dollar, its weakest since May 8, weakening past chart support at 44.151, a 200-day moving average.
The Philippine currency may weaken further on growing geopolitical concerns over Iraq, which is expected to cause offshore funds to sell the currency, a senior Philippine bank trader said.
RUPIAH
The rupiah slid on selling by foreign-backed domestic lenders amid lower bond prices.
Some state-run banks bought the rupiah, but traders were unsure if they were intervening as proxies for the central bank.
The official Jakarta Interbank Spot Dollar Rate (JISDOR), which Indonesia's central bank launched last year in an effort to manage exchange rate fluctuations, was fixed at 11,822 rupiah per dollar, weaker than the previous session's 11,766.
Growing geopolitical tensions in Iraq will put pressure on the rupiah as rising oil prices will hurt Indonesia's current account deficit further, traders said.
WON
The won lost as much as 0.4 percent to 1,041.3 per dollar, its weakest since April 25, with Seoul shares down more than 1 percent.
The South Korean currency is seen weakening to 1,050, analysts said, as it briefly weakened past 1,039.5, the 38.2 percent Fibonacci retracement of its appreciation April and July.
It has a 200-day moving average at 1,048.2 and the 50 percent retracement level at 1,049.2. The won has been firmer than the average since early September last year.
Investors are keeping an eye on a central bank's monetary policy meeting on Aug 14 with expectations of a rate cut.
The won, however, recovered most of its earlier losses on stronger-than-expected China's exports growth.
South Korean exporters also bought the won around 1,040 for settlements, traders said.
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