SINGAPORE: Most emerging Asian currencies fell on Thursday as strong US data lifted Treasury yields and continued to dash hopes for further stimulus by the Federal Reserve, putting pressure on riskier assets.
Regional units also came under pressure after China's Commerce Ministry said the trade outlook was worsening.
The Indian rupee and the South Korean won underperformed their Asian peers on catch-up selling after holidays on Wednesday in the countries.
The Philippine peso hit a near seven-week low and the Singapore dollar touched its weakest in almost three weeks as foreign funds sold both currencies.
"It is more unlikely to see another immediate US quantitative easing, so few are willing to bet on long Asian FX against the dollar," said Jeong My-young, Samsung Futures' research head in Seoul.
"Investors have no choice but to be guarded on riskier assets, although Asian FX will need to see more negative news from Europe for further weakness," Jeong added.
Data on Wednesday showed that US industrial output rose in July, while home-builder sentiment in August hit its highest level in more than five years, sending yields on benchmark US Treasuries to a fresh three-month high.
Those indicators came in the wake of a surprisingly strong reading on US retail sales that dampened expectations the Fed will launch another round of bond-buying, or quantitative easing, as early as September.
Despite some encouraging economic data from the United States, the global picture stayed grim.
China's trade outlook for the second half will be more severe than in the first six months, especially as Europe's problems worsen, the Commerce Ministry said, as it revealed the longest run of falling inward investment growth in the economy since the 2008-09 global crisis.
WON
The won eased as traders reduced long positions, which they could not cut on Wednesday due to a local holiday, as hopes of more Fed stimulus faded.
The South Korean currency found some relief, however, as domestic exporters bought it on dips and foreign investors continued to absorb Seoul shares.
Foreigners bought a net 353.2 billion won ($312.66 million) worth of stocks in the main exchange, extending their buying spree to an eighth consecutive session.
But actual won demand linked to the stock demand was smaller than the figure, preventing currency traders from chasing the won, dealers said.
"I see few reason to buy risk now," said a foreign bank dealer in Seoul, adding the won is seen having room to weaken to 1,140 per dollar where the local currency is seen having a technical support with a 200-day moving average at 1,140.8.
PHILIPPINE PESO
The peso softened to 42.430 per dollar, its weakest since June 29 as model funds and macro accounts sold the Philippine currency.
Interbank traders also covered short dollar positions, but the local unit recovered much of the losses on expectations of remittance inflows.
RINGGIT
The ringgit weakened to 3.1355 per dollar, its weakest since Aug 3 as interbank speculators and funds sold the Malaysian currency.
But the local unit recovered some of initial losses after strong economic growth data on Wednesday and with technical support at 3.1346, the 38.2 percent Fibonacci retracement of its strengthening between June and August.
Malaysia's economy grew 5.4 percent in the second quarter from a year earlier, the central bank said late on Wednesday, much higher than market forecasts, as a jump in private and government investment helped offset weakness in exports amid faltering global demand.
SINGAPORE DOLLAR
The Singapore dollar hit 1.2531 to the greenback, its weakest since July 27, weakening past the 50.0 percent Fibonacci retracement at 1.2524 of its July-August appreciation as macro funds and model accounts sold the city-state unit.
Interbank speculators also joined the offers, prompting stop-loss selling of the Singapore dollar, dealers said.
The local unit is seen heading to the 61.8 percent line at 1.2553, once the 50.0 percent line is cleared.
RUPIAH
The rupiah edged up, but the Indonesian currency was under pressure from dollar demands of oil importers before holidays and bond outflows, while the central bank provided the greenback to limit the local currency's slide, dealers said.
Local and foreign banks purchased dollars, but Bank Indonesia offered dollars at 9,515, they added.
Indonesian financial markets will be closed from Friday to Wednesday for holidays.
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