Asian currencies were dragged lower by the Japanese yen as oil prices rose to record highs on Wednesday, with many ending in territory that sparked the concern of central banks last week.
The Thai baht was trading near a one-year low, and the Indonesian rupiah weakened through 9,200 per dollar to hit a one-month low of 9,245, before finding some support from talk the central bank was checking prices with dealers.
The Singapore dollar steadied near 1.7240 per dollar, about half a cent ahead of last week's trough, on suspicion the Monetary Authority of Singapore might try to arrest further losses.
The Taiwan dollar unwound two days of gains and ended within sight of last week's eight-month low of 34.27 per dollar.
"Bearishness about Asia has been brewing for a few months now," said Bank of America senior strategist Simon Flint.
"Oil prices have reached values where people are not just concerned about the impact on Asia's trade account but also worrying about how much higher oil prices are going to slow down global demand for the rest of Asia's products."
Oil hit $44.28 per barrel on Wednesday, the highest since the launch of oil futures on the New York Mercantile Exchange in 1983.
Flint said prices were falling for technology and semiconductors, key exports for the region, making the terms-of-trade deterioration worse for Asia.
The Philadelphia Stock Exchange's semiconductor index fell almost four percent on Tuesday to be only 3.2 percent above a one-year low.
Sentiment in Asia was also not helped by weaker-than-expected US consumer spending data, as any slowdown in US demand would be bad news for Asia's export-driven economies.
Asia imports most of its oil - some countries like Japan and South Korea import all of their oil - and the record prices have raised worries about the impact on growth and inflation.
Indonesia, Asia's only Opec member, has been a net importer of crude oil this year. Finance Minister Boediono said the 2004 budget would remain manageable despite the high oil prices increasing the cost of oil subsidies.
The South Korean won matched the falls of other regionals on Wednesday, and remains the only Asian currency to have gained against the dollar this year.
While the oil worries have pressured it, the won has been supported by foreigners purchasing a net $442 million of Korean equities over the last six days. Flint said the won had been the most resilient of Asian currencies in recent months. It had fallen just 0.7 percent from its trade-weighted high in mid-April, less than other currencies.
That strength, especially given Korea's dependence on oil and a weak domestic economy, was a little surprising, and Flint said he was looking for some catch-up losses over the next few months.
The won traded in a range around 10.5 per yen as it did on Monday and Tuesday. The market is wary of letting the won strengthen against the yen, believing authorities would intervene to protect export competitiveness.
After the cross rate held near 10 in 2002 and most of 2003, it has traded between 10.4 and 11.2 for the past 10 months.