The Singapore dollar and the South Korean won led a slide among emerging Asian currencies as investors avoided risky assets on sustained worries about the eurozone's debt problems, with Spain due to hold a bond auction later in the day. The Indian rupee briefly found support from a surprise 50-basis-point rate cut by the central bank, but the impact did not last long.
Most regional units started the day slightly firmer, but a weaker euro and softer regional stocks prompted profit-taking. "The current levels of Asian currencies do not necessarily reflect a 'worst-case' scenario for Spanish debt. If the situation deteriorates, it could drive depreciation," said Sacha Tihanyi, senior currency strategist at Scotia Capital in Hong Kong. US dollar/Singapore dollar rose on short-covering and with the city state suffering an unexpected fall in March exports.
Singapore dollar/ringgit also slid 0.5 percent to 2.4481 on profit taking. But the cross pair is expected to rise, probably to 2.4800 as it broke the previous high near 2.4535. Dollar/won gained on demand linked to dividend payments by domestic companies to foreign shareholders.
The pair ended local trade at 1,140.5, higher than the top of the daily Ichimoku cloud near 1,139.0, as dividend-related dollar bids prompted interbank players to cover short positions. SK Telecom was scheduled to pay 277.3 billion won ($243.54 million) in dividends to foreign shareholders on Tuesday, according to Reuters calculations. Taiwanese exporters sold US dollar/Taiwan dollar in a subdued trading. But local importers also bought the pair below the level and investors remained worried about Spain, limiting its downside, dealers said.