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SEOUL: Most emerging Asian currencies fell on Wednesday, pressured by a weaker Chinese yuan and caution before the Federal Reserve's policy decision due later in the day.
Thailand's baht, however, hit a three-month high as the government lifted a state of emergency in Bangkok, taking a step to restore some confidence as anti-government protests subside.
The Philippine peso fell to its weakest level in nearly five weeks on bond outflows and corporate dollar demand. The South Korean won eased on dollar bids from offshore funds and local importers.
The yuan earlier lost more than 1 percent against the dollar, the first time it has fallen by such a margin, after the daily trading band was widened.
"Asian currencies are likely to stay weaker, given an unstable yuan and continued worries about China," said Yuna Park, a currency and bond analyst at Dongbu Securities in Seoul.
"If the dollar rebounds with strong US economic data after the severely cold winter, Asian currencies may come under more pressure," Park added.
The US economy was hit by unusually cold weather at the end of 2013 and early this year but recent indicators suggest it is regaining momentum. Manufacturing output in February enjoyed its largest increase in six months, data showed on Tuesday.
The Fed is widely expected to continue reducing its monthly bond purchase programme by $10 billion, but also to alter its forward guidance in its policy statement later in the day, the first policy review to be presided over by new Fed Chair Janet Yellen.
PHILIPPINE PESO
The peso fell 0.4 percent to 44.88 per dollar, its weakest level since Feb. 13, as interbank speculators covered dollar-short positions in the greenback.
The Philippine currency fell in non-deliverable forwards markets as some offshore funds cut bullish bets on the unit.
The peso is likely to stay in a range between 44.30 and 45.00 per dollar for the time being, a senior Philippine bank trader in Manila said.
The trader, however, said he prefers to sell the peso on rallies, saying global risk sentiment stays fragile.
"I will be cautious as it is still very much a risk-off environment for now," said the trader.
"If talk of China problems gains more traction, we may find ourselves at 46," he added.
WON
The won eased on dollar demand from offshore funds and South Korean importers.
Exporters took the currency's slide below 1,070 per dollar as a chance to buy it on dips for settlements, traders said.
"The won tracked the yuan, while importers' dollar demand is seen strong enough to absorb exporters' deals," said a South Korean bank trader in Seoul.
BAHT
The baht rose as much as 0.3 percent to 32.050 per dollar, its strongest level since Dec. 18, according to Thomson Reuters data.
Some investors took profits from the Thai currency, seeing chart resistance at 32.005, the 50 percent Fibonacci retracement of its depreciation between September January.
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