REUTERS - The Indian rupee and South Korean won led falls among emerging Asian currencies on Wednesday, with investors waiting for the outcome of the United States Federal Reserve's policy meeting for clues on when it will start tapering monetary stimulus, while most regional units were set to slide for July.
The rupee approached a record low on doubts over the central bank's ability to defend the ailing currency, although its downside was limited by intervention, traders said.
Offshore funds sold the South Korean won, while the ringgit hit a fresh three-year low after Fitch Ratings cut Malaysia's credit ratings outlook.
The Singapore dollar and the Thai baht fell to their weakest levels in about three weeks on offers from real money funds.
The US dollar rose slightly ahead of the Federal Reserve's post-meeting statement later in the day. But Fed Chairman Ben Bernanke is not scheduled to hold a press conference.
The US central bank appears certain to wait for further economic data before scaling back its stimulus even though policymakers are likely to have a lively debate on how best to prepare financial markets for a reduction of their bond-buying programme.
Emerging Asian currencies are expected to stay weak next month on the Fed's looming policy shift and a slowing Chinese economy, analysts and traders said.
"We look for further weakness in EM currencies in August, including in Asia ex-Japan. The macro backdrop remains challenging, with the Fed likely to taper in September or the fourth quarter and China continuing to decelerate. Meanwhile, Asian exports generally remain soft," said Callum Henderson, global head of FX research with Standard Chartered in Singapore.
"As such, we see a further down-leg in Asia ex-Japan currencies in the third quarter before greater value is found," he added.
The Singapore dollar fell as much as 0.3 per cent to 1.2740 to the greenback, the weakest since July 10, as real money funds continued to sell the currency.
Singapore's jobless rate at the end of the second quarter rose to 2.1 per cent from 1.9 perc ent in the first quarter, government data showed.
