The Indonesian rupiah fell to a fresh 14-month low and other Asian currencies found little respite on Monday from a pullback in the price of oil as markets focused increasingly on the risks to growth and flows.
The Japanese yen provided little direction to the regionals even though the US dollar rose modestly after Saudi Arabia's proposal to increase oil supplies from the Opec cartel helped prices come off last week's 21-year highs above $41 a barrel.
A statement from a Group of Seven meeting in New York over the weekend focused on getting oil producing countries to increase output and did not mention foreign exchange.
But barring short-term trades, investors were keeping to the sidelines and analysts worried about bigger threats to the region's economic recovery.
"Major headwinds are building in the second half of this year," economists at Lehman Brothers wrote in a note.
Lehman Brothers cited a slowing Chinese economy and the vulnerability of the region to high global oil prices as the two big risks, and looming US rate rises as another risk.
"The coming US rate tightening cycle will likely reduce the strong foreign capital inflows to Asia ex-Japan, thereby sucking liquidity from the region."
"And finally, a broad-based regional economic slowdown is likely to have second-round effects, via a slowdown in intra-regional trade, as well as negative wealth and confidence effects from falling asset prices," Lehman said.
Within Asia, the rupiah was quoted at 9,100 per dollar, its lowest since March 2003.
The rupiah has shed nearly eight percent this year and has been dogged by political uncertainty and the exit of foreigners from investments in Indonesia's high-yielding assets.
Others in the region such as the Singapore dollar and the Korean won were slightly weaker but pinned to narrow ranges. The Taiwan dollar, Thai baht and Philippine peso were almost unchanged.
"The macro trend of US dollar weakness is still very much intact but, in the short term, it is impossible to determine whether Asian currencies are going to strengthen or weaken," said Peter Redward, currency strategist with Deutsche Bank.
"We have got ongoing risk aversion, high oil prices, fear of what is going on in the Middle East." "Although equity inflows have come back into the region they remain relatively fragile flows," Redward said.
Stock markets in Tokyo and Seoul were up on Monday, but Taiwan stocks were undermined by profit booking.
Some anxiety arose from China's remarks that Taiwan President Chen Shui-bian's inaugural speech last week, which seemed aimed at placating China, was all about Taiwan's independence. In Korea, foreigners turned sellers of stocks on Friday after being net buyers for three sessions.
According to a media report, foreigners pulled out $3.62 billion from South Korea in the 20 days to May 19, the biggest net outflow in a 20-day period since the country opened its markets to overseas investors in May 1998.