Asian currencies succumbed to falling stock markets and rising oil prices on Tuesday, losing some ground in distracted trade as the market waited to hear testimony from US Federal Reserve Chairman Alan Greenspan.
The Singapore dollar was among the few that tried to strengthen in early trade, testing under 1.70 per dollar, but found it hard to resist the falls elsewhere, led by the yen, and ended a touch softer.
The Thai baht kept a low profile around 40.80 per dollar to end flat, while the Philippine peso made slight gains but was unable to stage a convincing rally from last month's record lows.
The yen weakened as the Nikkei average fell to its lowest close in seven weeks. However, there was no rush to buy dollars ahead of Greenspan's testimony, which the market hopes will offer some clarity on the outlook for interest rates.
Since the Fed tightened policy on June 30, much debate has centred on what is a "measured" pace of tightening. A run of softer-than-expected data up to Friday's inflation report have seen the market scale back expectations of aggressive tightening.
While that saw the dollar retreat against Asian currencies on Friday and Monday, the stock market losses ended the gains.
"Asian stock markets reflected an outright negative sentiment amongst investors this morning compared with indifferent trading bias seen in US stocks," UBS currency strategist Bhanu Baweja said in a client note.
Adding further weight to Asian currencies, oil prices headed towards $42 a barrel. Asia is dependent on oil imports, and high prices are a potential crimp on growth and risk to inflation.
Asian stock markets weakened on concerns about the outlook for technology and semi-conductor stocks. On Monday, the Philadelphia Stock Exchange's semiconductor index fell to an 11-month intra-day low, and it is down 14.8 percent since the end of June. Pressure on the tech sector saw Taiwan's main stock index close at its lowest since last August, and the Taiwan dollar ended local trade at its weakest since January 2.
The Korean won, which led the rally in regionals on Monday, lost about 0.3 percent as the main share index fell 1.8 percent on the tech worries and high oil prices.
The Indonesian rupiah, the weakest Asian currency so far in 2004, slipped back towards 9,000 per dollar, where it was expected to find some support.
The rupiah broke through there in early July, boosted by the peaceful lead-up and running of the July 5 presidential election.