A modest recovery in Japanese stocks and the yen, as well as some intervention by regional central banks, gave some support to weak Asian currencies on Tuesday, despite worries about possible rate rises in the United States.
Even some regional stock markets clawed back, sapping the US dollar's upward momentum. The dollar jumped after data on Friday showed a further improvement in the US jobs market, reinforcing expectations for higher US interest rates.
As the yen recovered from eight-month lows, the Singapore dollar rallied to near 1.72 from a 5-1/2 month trough around 1.7273.
The Indonesian rupiah was back on the firmer side of 9,000 per dollar from its lowest point since March 2003.
The Thai baht recovered modestly from an eight-month low and the Taiwan dollar came off a four-month low of 33.81.
Traders suspected the central banks in Indonesia and India sold dollars to defend their currencies.
Exporters were also seen selling dollars in India as the rupee fell sharply, creating a big gap on the chart, to a four-month low near 45.40.
Local politics and the rising global oil prices also played a role in undermining the regionals in early trade.
The Philippines started counting votes after Monday's presidential elections, Taiwan has begun the recounting of its disputed presidential election, and South Korea awaited a ruling on the president's impeachment.
Indian markets worried that the three-week election, which ended on Monday would produce a hung parliament, threatening key reforms.
Exit polls indicate Prime Minister Atal Behari Vajpayee's ruling coalition (NDA) might not get a majority.
"The market is on the edge trying to balance between who will form the Government and what happens to the petrol price hike after the formation of the government," said U.Venkataraman, head of forex and money markets at IDBI Bank, Bombay.
But exporters were selling their dollars at these levels and there would be heavier sales on any news of Vajpayee's coalition returning to power at the centre, he added.
The Philippine peso hit 56 per dollar, off last week's four-month high near 55.30, despite preliminary vote counts showing incumbent President Gloria Macapagal Arroyo in the lead.
At the end of Tuesday trading, Asian currencies and stocks were still much weaker than they were on Friday, before the US jobs data was released.
Taiwan's stock index has fallen 2.5 percent and Korea's index has weakened by more than five percent since Friday. Singapore's main stock index is down over two percent since Friday. Hong Kong has dropped over three percent and Indonesia 4.5 percent.
"Fears over a China slowdown, higher oil prices and tightening liquidity have shaken foreign investors out of their long positions in Asian stock markets," said Bhanu Baweja of UBS.
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