The South Korean won and the Taiwan dollar fell to three-week lows on Monday as high oil prices threatened economic growth and talk of an acceleration in US interest rate rises took the shine off Asian assets. The won lost as much as half a percent to 1,009.3 per dollar, its weakest level since February 25, before ending domestic trade at 1,009.1.
The Taiwan dollar lost as much as half a percent to 31.29 per dollar.
The Philippine peso bucked the trend and rose after newspaper reports said the government planned to hasten the privatisation of National Power Corp and attract more foreign direct investments in its mining industry.
Surging oil prices are clouding Asia's economic outlook as the region imports the bulk of its oil. US crude oil futures traded at $56.6 per barrel on Monday, close to Thursday's record high of $57.60 and up almost 33 percent this year.
The high oil prices combined with political tensions in Northeast Asia and speculation that the US Federal Reserve may indicate a faster pace of rate increases after a meeting on Tuesday, has triggered a sell-off in Asian stocks by foreign investors.
"Emerging Asia exchange rates are vulnerable to the combination of a hawkish Fed, high oil prices and uneasy tensions in Northeast Asia pertaining to Taiwan and North Korea," Fong Cheng Hong, head of economic-market research at DBS Bank, said in a report.
"Oil may become more of a drag in the months ahead, especially coupled with rising interest rates."
On Monday, foreign investors were net sellers of South Korean stocks for the 13th consecutive session and net sellers of Taiwan stocks for the sixth straight session.
"With oil import dependency of 40 percent for China, 70 percent for India and nearly 100 percent for most other Asian economies, oil is becoming a growing negative," said Irene Cheung, head of Asia currency strategy at ABN Amro Bank.
Investors in Taiwan have grown edgy as political parties plan mass rallies this weekend to oppose a new anti-secession law in China that sought to give Beijing a justification to attack if self-ruled Taiwan moves to secede.
Asian currencies lost further ground against the dollar on expectations the US Federal Reserve may toughen its stance on the pace of interest rate increases on Tuesday.
The Singapore dollar and baht weakened about 0.15 percent, following the yen, which lost 0.3 percent.
Analysts polled by Reuters expect the Fed to raise the rate by 25 basis points on Tuesday.
The Fed has raised official interest rates by a quarter point at each of its last six meetings, taking the federal funds rate to 2.5 percent.
Analysts said any hint of an acceleration in the pace of future US rate increases may lead to an outflow of funds from high-yielding Asian bonds such as those from Southeast Asia.
The Indonesian rupiah weakened as much as a third of a percent to 9,390 per dollar.
The rupiah is Asia's worst performing currency this year after the Japanese yen, having weakened 1 percent since the end of December.
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