Most Asian currencies fell on Wednesday, as weakness in regional equity markets gave investors another reason to dump them in favour of the dollar. A fall in the yen to two-year lows against the US currency and a perception that US interest rates will keep rising to curb inflation also hurt regional currencies.
The Taiwan dollar led the way, shedding about 0.4 percent to 33.726 per US dollar, its lowest level in almost a year.
The South Korean won hit a three-month low at 1,055.5 per dollar, while the Singapore dollar weakened about 0.3 percent to 1.6989 against the US dollar - its lowest level since early July.
"We have seen some pretty nasty moves in stock markets in Singapore, Korea and elsewhere, so there is money going into the dollar," said Alex Jaeschke, head of derivatives trading at HVB in Hong Kong.
Concerns about how far US interest rates would rise and disappointing forecasts from semiconductor giant Intel Corp pushed Singapore's equity market to a three-month low and Taiwan stocks to a six-month trough. Shares in Seoul suffered their biggest one-day percentage fall in over six months.
Foreign investors were net sellers of Taiwan stocks for a sixth consecutive session on Wednesday and net sellers of South Korean shares for the 19th session in a row.
Rhee Gwang-ju, director general at the Bank of Korea's international department, told Reuters the won was unlikely to strengthen against the dollar for at least three months.
Comments late on Tuesday from Federal Reserve Vice Chairman Roger Ferguson that the energy price surge following hurricanes Katrina and Rita had worsened the inflation outlook kept the US rate debate in focus, and dealers said that would weigh on Asian currencies.
The Thai baht, against a backdrop of regional currency weakness, failed to benefit from the Bank of Thailand's decision to raise interest rates by 50 basis points, even though it was a larger rise than many analysts had been expecting.
The central bank lifted the key 14-day repurchase rate to 3.75 percent, its eighth rate increase since August 2004, to contain inflation that is running at a seven-year high.
"Dollar/baht is higher in line with the rest of the region," said Callum Henderson, head of currency strategy at Standard Chartered in Singapore.
"The baht should recover in the days ahead. The Bank of Thailand's statement is hawkish and Thai rates are now in level with US rates, so this is good news."
The Indonesian rupiah and Philippine peso held up relatively well in the face of broad-based dollar strength, with the peso supported by Tuesday's Supreme Court decision to throw out the last challenges to a broader sales tax.