SINGAPORE: Most emerging Asian currencies edged up on Tuesday after their sharp sell-off, but the outlook for the region remains bearish as the dollar hovered around a 14-year peak on rising US Treasury yields.
The rupiah rose as Indonesia's exports in October beat expectations, resulting in a larger-than-expected trade surplus. South Korea's won edged up as foreign stock selling slowed.
Still, some regional currencies turned weaker with the Chinese yuan touching a near eight-year low on the dollar's strength. The Malaysian ringgit extended losses to around a 10-month trough as most government bond prices slid.
India's rupee fell to its lowest in about five months on catch-up selling after a local holiday on Monday when regional peers lost ground.
The US dollar vaulted above its January peak against a basket of six major currencies to hit 100.22 - within reach of its December 2015 peak of 100.51 - and a rise above that would take it to its highest level since 2003.
The greenback stepped back a bit, but investors did not dare add bullish bets on emerging Asian currencies due to the rally in Treasury yields on expectations that US inflation would rise on President-elect Donald Trump's policies.
Most emerging Asian bond prices extended losses.
"The near-term key risks are the uncertainties related to Trump and flight to safety," said Nordea Markets' chief analyst Amy Yuan Zhuang in Singapore, expecting further weakness in emerging Asian currencies.
"Markets also see 92 percent probability of the Fed hiking in December, so Asia FX could see more pressure until then," Zhuang said, referring to the US Federal Reserve.
WON
The won earlier gained as much as 0.6 percent to 1,164.7 per dollar.
Foreign investors sold a net 65.6 billion won ($56.1 million) worth of Seoul shares by the afternoon. The local main stock market reported a combined outflow of 784.0 billion won over the previous two straight sessions, the Korea Exchange data showed.
The South Korean currency gave up much of its earlier gains as foreign investors dumped a near 1.4 trillion won worth of bonds, especially short-dated notes.
RINGGIT
The ringgit lost as much as 0.5 percent to 4.3450 per dollar, its weakest since Jan. 22.
Malaysia's government 10-year bond yield rose to 4.192 percent, its highest since Jan. 15.
The Malaysian currency recovered some of its earlier losses as local stocks jumped about 1 percent.
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