SINGAPORE: The Indonesian Rupiah hit a ten-week low on Tuesday, leading losses among emerging Asian currencies, as investors awaited Federal Reserve Chair Janet Yellen's testimony for clues on the timing of US interest rate hikes.
The Rupiah came under further pressure from increasing dollar demand from local companies for month-end payments.
The Philippine peso fell to a near two-week low after the central bank on Monday said it may keep interest rates unchanged this year, defying some expectations of tightening in the second half. The country also posted a trade deficit in December.
Yellen speaks to Congress later in the day with mounting uncertainty over whether she will maintains the dovish tone of the minutes from the Fed's last policy meeting or reaffirm June as a window for a first rate hike.
"I will still stick to risk-off trade which means mixed USD performance against majors but higher USD/Asia, for the moment," said Andy Ji, Asian currency strategist for Commonwealth Bank of Australia in Singapore.
"Uncertainties in the Fed's policy path and global growth outlook persist in the next quarter or two. Asian growth is slowing and disinflation risks shift regional central banks into easing bias."
Most emerging Asian currencies have fallen this year as some regional central banks such as Bank Indonesia and the Monetary Authority of Singapore unexpectedly eased monetary policy.
These stimulus measures were introduced ahead of any decision by the Fed to raise interest rates later in the year on solid growth in the world's top economy.
The Rupiah slid as much as 0.4 percent to 12,880 per dollar, its weakest since Dec. 16.
Offshore hedge funds sold the currency in one-month non-deliverable forwards.
The official Jakarta Inter-bank Spot Dollar Rate, which the central bank introduced in 2013 to manage exchange rate fluctuations, was fixed at 12,866 Rupiah per dollar, weaker than the previous session's 12,813.
The central bank was spotted intervening to limit the Rupiah's downside, traders said.
The Philippine peso eased 0.1 percent to 44.33 per dollar, its weakest since February 12.
The Philippine central bank can afford to leave its policy setting on hold for most of this year and the timing and magnitude of any interest rate hike would not be determined by the Fed's actions, its governor told Reuters on Monday.
Economists in a poll in February predicted the central bank would resume raising interest rates as early as in the second half of the year, or in 2016, depending on when the Fed starts raising borrowing costs.
The Philippines reported a trade deficit of $68.2 million in December with imports down 10.6 percent, the biggest decline since April 2012, data showed earlier on Tuesday.
Malaysia's Ringgit rose on demand from oil exporters for month-end settlements.
The Ringgit found more support as investors bought it against the neighbouring Singapore dollar.
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