Most emerging Asian currencies slipped on Tuesday, as the dollar steadied against the yen after three straight sessions of declines on rising trade tensions between the United States and China.
China imposed extra tariffs on 128 US products, in response to US tariffs on imports of aluminium and steel, deepening a dispute between the world's two biggest economies and stoking concerns about the impact on global growth. On Tuesday, China's ambassador to Washington said Beijing would take counter-measures of the "same proportion" and scale if the United States imposes further tariffs on Chinese goods from a trade probe, state television reported.
China's tit-for-tat tariffs hurt the dollar, although it saw some buying during early Asian trading on Tuesday. The dollar index was still a shade softer against a basket of currencies.
Wall Street shares plunged on Monday as investors fled technology stocks amid resurgent trade war worries, with key indexes trading below their 200-day moving averages and the S&P 500 closing below that pivotal technical level for the first time since June 2016.
"Asian equities opened in the red this morning, following the sell-off in US equities overnight. Persistent price action below 200 DMA (day moving averages), trade war fears and UST yield curve compression could result in a self-inflicted risk-off cycle," said Christopher Wong, a Singapore-based FX strategist with Maybank. The South Korean won was the biggest loser among Asian currencies, down as much as 0.3 percent, after hitting its strongest intraday level since October 2014 on Monday.
South Korea's government official in charge of foreign exchange said on Tuesday that authorities will act to curb sharp fluctuations in the won if necessary. The Thai baht and China's yuan both slid as much as 0.2 percent, while the Philippine peso inched down 0.1 percent.
Meanwhile, the Singapore dollar firmed as much as 0.2 percent, and the Indian rupee edged up 0.1 percent. The South Korean won, which hit a three-and-a-half-year high on Monday, weakened as much as 0.2 percent on Tuesday.
South Korea's currency authorities said there is no change in their stance to take action in cases of high currency volatility after the Korean won hit a 3-1/2-year high on Monday. The United States often presses Seoul to disclose details of currency interventions to improve transparency of its currency policies.