Asian currencies hit multi-month lows on Tuesday, beaten back by tumbling stocks on persistent worries the United States will raise interest rates this month despite signs growth is slowing.
As risk aversion stung Asia's stocks and bonds markets, regional currencies were led lower by the Indonesia rupiah, which fell 1 percent to 9,510 per dollar, its lowest level since January.
The South Korean won and Taiwan dollar both slipped about half a percent each, their lowest levels in around two months.
The Malaysian ringgit hit a 2-1/2 month trough at 3.6885 per dollar and the Philippine peso, which resumed trade after a market holiday on Monday, hit its lowest level this year at about 53.35 per dollar.
Even the Singapore dollar, which has held up relatively well, could not fight the trend. It slipped to 1.5998 per United States dollar, the lowest in almost eight weeks.
"The selling that we are seeing now is more broad-based and it doesn't look like it will end soon," said Odie Lee, a trader at Bayerische Hypo und Vereinsbank in Singapore.
Asian stocks fell sharply on Tuesday following a sell-off on Wall Street as persistent tough talk from Federal Reserve officials on inflation bolstered expectations the United States central bank will raise rates this month for the 17th consecutive time.
"Today's sell-off in Asia is not surprising given the sell-off in the S&P stock index," said Jan Lambregts, head of Asia-Pacific research at Rabobank. "The Nikkei came off sharply, so emerging markets have suffered as well."
In South Korea, the key stock index fell to seven-month low as foreign investors sold net 162.2 billion worth of shares. They have already dumped a net 1.15 trillion won in shares in the previous four sessions.
India's main share index slid to a 6-month low, Malaysia's stock index fell to its lowest since January and Japan's Nikkei share average posted its biggest one-day percentage loss in two years.
"The negative financial flows for the region in this environment outweigh the trade-related FX inflows into the region," he said.
"Intervention aside, the effect is to pressure regional currencies."
The sell-off in Asian markets followed sharp falls in Latin American stocks overnight. In early European trade, the Turkish lira shed more than three percent versus the dollar and the Polish zloty hit a 7-month low against the euro.
The rupiah bore the brunt of selling among emerging market currencies in Asia - as it has done in the past month.
The Indonesian rupiah has lost about 8.5 percent since hitting a 2-year high of 8,685 per dollar on May 11, but it is still up by 3.6 percent this year assets in other emerging markets like Indonesia to cover losses in other regions."
Thai markets are shut for a second day for the Diamond Jubilee of revered King Bhumibol Adulyadej.
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