BENGALURU: Most Asian currencies edged lower against the dollar on Wednesday as escalating tensions on the Korean peninsula prompted investors to shun riskier assets.
A top North Korean diplomat on Tuesday warned that his country is ready to send "more gift packages" to the United States and confirmed that North Korea had successfully conducted its sixth and largest nuclear bomb test on Sunday.
Many investors responded by shifting some of their portfolios into assets which are believed to be safer, leaving the dollar around 0.2 percent lower against the yen, a popular means to reduce exposure to risk.
"North Korea is keeping a lot of Asian currencies on the backfoot. This morning's moves are not overwhelming per se, just cautious positioning...," said Vishnu Varathan, head of economics and strategy at Mizuho Bank in Singapore.
In Asia, the Korean won lost the most against the dollar, weakening 0.4 percent to a more than two-week low.
South Korean equities were also lower for a fifth consecutive session.
The Singapore dollar dipped, although economists raised their forecasts for Singapore's economic growth in the third quarter, with manufacturing activity likely to remain solid, a central bank survey showed on Wednesday.
On the other hand, the Malaysian ringitt rose to a near 10-month high after data showed export surged more than expected in July.
MALAYSIAN RINGITT
Malaysia's export growth in July rose 30.9 percent from a year earlier on higher shipments of manufactured products and mining goods, beating the 23.1 percent rise forecast by a Reuters poll.
"On one hand you've got oil prices being a lot firmer today.
Over and above that, Malaysian data surprised a little bit more on the upside today," said Mizuho's Varathan.
"The ringgit is having a bit of catch-up trade today, as it has been a laggard against the dollar of late." - Reuters
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