(Reuters) - South Korea's won fell for a third straight day on Tuesday, hitting a four-month low after North Korea launched a ballistic missile days ahead of a summit of leaders from the Group of 20 countries in Germany later this week.
North Korea has been working to develop a nuclear-tipped intercontinental ballistic missile capable of hitting the United States, ignoring repeated warnings from the international community.
The won dived as much as 0.4 percent to its weakest level since March 10.
"South Korea has two big risks, the first is North Korea and the second is the tapering of European Central Bank and Bank of China. North Korea's missile test today will have an impact on the market in the short term," said Will Yun, an FX analyst at Seoul-based Hyundai Futures Corp.
"We were preparing for the outflow of U.S. money, but not Europe, and if there is money outflow from Europe, our stock market goes down and so does the won."
South Korean shares were little changed, with the Korea Composite Stock Price Index (KOSPI) at 2,393.27.
Most other emerging Asian currencies were trading within a narrow range.
"Price action into the U.S. Independence Day holiday (is) expected to be choppy with investors not likely to extrapolate too heavily from pre-holiday trade overnight," OCBC Bank said in a note.
The Indian rupee and the Singapore dollar edged up, while the Taiwan dollar dropped to nearly a three-month low.
Investors will keep an eye out on the Fed minutes, due on Wednesday, and U.S. jobs data which will be released on July 7.
Thailand's baht slipped to a near-two week low on Tuesday, heading for its second consecutive session of declines,
Economists agree that Thailand's central bank on Wednesday will keep its low benchmark interest rate where it has been for more than two years, in line with the economy's current position.
The central bank has said monetary policy still supports economic recovery, which continues to face global uncertainty, while it remains concerned about the hunt for higher yield in a prolonged low interest rate environment and high household debt.
Growth in Southeast Asia's second-largest economy has lagged regional peers in recent years. The Bank of Thailand, which forecast growth of 3.4 percent this year, will review that projection on Wednesday.
The Indonesian rupiah fell as much as 0.2 percent, hitting its lowest level in more than six weeks.
Indonesia is hoping for additional inflows worth $10 billion from pension funds and other institutional investors over the next two years following Standard & Poor's upgrade of its credit rating to investment grade
For the first time in almost 20 years, Indonesia is rated investment grade by all three major rating agencies after S&P on May 19 raised its outlook to 'BBB-' from 'BB+', matching the ratings already awarded by Fitch and Moody's.
While growth in Indonesia's gross domestic product has slowed from a peak of more than 6 percent several years ago to around 5 percent due to a commodity downturn, its vast domestic market is still seen as an engine of growth.
The following table shows rates for Asian currencies against the dollar at 0525 GMT.
Currency Latest bid Previous day Pct Move
Japan yen 112.980 113.37 +0.35
Sing dlr 1.382 1.3825 +0.04
Taiwan dlr 30.490 30.428 -0.20
Korean won 1149.000 1146.9 -0.18
Baht 34.000 33.98 -0.06
Peso 50.490 50.545 +0.11
Rupiah 13375.000 13365 -0.07
Rupee 64.843 64.88 +0.05
Ringgit 4.297 4.2965 +0.00
Yuan 6.797 6.7990 +0.03
Change so far in 2017
Currency Latest bid End 2016 Pct Move
Japan yen 112.980 117.07 +3.62
Sing dlr 1.382 1.4490 +4.85
Taiwan dlr 30.490 32.279 +5.87
Korean won 1149.000 1207.70 +5.11
Baht 34.000 35.80 +5.29
Peso 50.490 49.72 -1.53
Rupiah 13375.000 13470 +0.71
Rupee 64.843 67.92 +4.75
Ringgit 4.297 4.4845 +4.38
Yuan 6.797 6.9467 +2.20
Reporting by Christina Martin in Bengaluru; Editing by Jacqueline Wong