The Indian rupee extended a month-long decline to a 13-month low on Tuesday while the Thai baht dropped more than half a percent as the dollar's broad-based rally forced importers and banks to cut local currency losses.
The Indian rupee broke through the 46-per-dollar mark last seen in September 2004 before dollar sales by state-run banks helped stem its decline.
The baht broke through the key 41.1-per-dollar level triggering dollar-buying by local banks as they cut losses.
The Singapore dollar joined the trend of weakening Asian currencies as it fell to a four-month low, trading weaker than 1.7 per dollar for the third consecutive day.
Analysts said markets were aligning Asian currencies with the yen's losses against the surging dollar even though some traders had renewed their bets of a further yuan appreciation ahead of a November 19 visit to China by US President George W. Bush.
"The Japanese yen is what Asian currencies are looking at, not the Chinese yuan," said Philip Wee, currency strategist at Singapore's DBS Bank.
The yen traded near a two-year low against the dollar.
Since the end of June, the dollar has gained 6.4 percent against the yen, while it has advanced only 1 percent against the Singapore dollar, 5.5 percent against the Indian rupee and is little changed against the Thai baht.
Dealers said that is probably why the Bank of Thailand was absent from the market, indicating that the central bank would not mind a weaker baht to keep local exporters competitive in the face of broadly weakening Asian currencies.
Still, analysts said, central banks would smooth out sharp moves in their currencies, similar to the one that helped bring the Indian rupee back to 45.87 per dollar levels on Tuesday.
The South Korean won and the Philippine peso bucked the trend of weakening Asian currencies.
The won firmed for the first time in four days, rising to 1,045.5 per dollar before ending local trading at 1,048.5 per dollar.
Roh Sang Chil, a currency trader at Kookmin Bank in Seoul, said the South Korean won was likely to trade in tight ranges between 1,046 per dollar and 1,050 per dollar.
The won traded around 8.89 per yen on Tuesday after hitting a seven-year high of 8.8448 per yen on Friday.
The Philippine peso, which has outperformed Asian rivals this year, rose to a five-month high of 54.52 per dollar.