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Asian currencies fell yesterday, led by South Korea's won and Taiwan's dollar, as the region's stocks extended a global equity rout.

The won declined to its lowest since 1998 on concern demand for the nation's assets and exports is dwindling amid a deepening global economic slump. Korea's economy probably grew during the last quarter at the weakest pace in four years, a Bloomberg survey showed. Nine of the 10 most-traded Asian currencies outside Japan showed declines.

"Foreign stock sales are heavily weighing on the won," said Kim Yule, a currency dealer with BNP Paribas in Seoul. "Traders are on the lookout for intervention but the won is set for further weakness as demand for dollars is so strong."

The won fell 3.4 per cent to 1,408.80 per dollar at the 3pm close in Seoul, according to Seoul Money Brokerage Services Ltd. The Kospi stock index slumped 7.5 per cent as overseas investors sold more shares than they bought for a seventh day, according to Korea Exchange. The won has lost 33.2 per cent this year, making it Asia's worst performer.

Korea's gross domestic product rose 0.6 per cent from the previous quarter, when it advanced 0.8 per cent, according to the median estimate of 16 economists surveyed by Bloomberg News. The government will report the data today.

The MSCI Asia-Pacific Index of regional shares dropped as much as 5.2 per cent after the Standard and Poor's 500 Index fell 6.1 per cent on Wednesday. Japan's Nikkei 225 Stock Average slumped 2.5 per cent yesterday.

The dollar rose to the highest against the euro in almost two years on speculation the US government will increase support for the housing market.

The currency advanced for a seventh day on bets the European Central Bank will favour interest-rate cuts to support the 15-nation economy. The Wall Street Journal reported the US may spend US$40 billion (Bt1.39 trillion) to prevent more home foreclosures, citing a person familiar with the plan. The yen trimmed gains as US stock futures climbed and Asian stocks pared losses.

"After this news came out, stock futures rose and the currency market went into reverse," said Motonari Ogawa, director of currency trading in Tokyo at Barclays Capital Inc, a unit of the UK's third-biggest bank. "This is somewhat positive for the dollar."

The US currency touched $1.2728 per euro, the strongest since November 2006, before trading at $1.2824 versus $1.2855 late in New York on Wednesday. The dollar also traded at 97.59 yen from 97.66 yen.

Taiwan's dollar dropped for a seventh day on concern the island's electronics exports may shrink as global demand slows.

The currency fell to a 17-month low as a government report was expected to show yesterday that export orders rose last month at the slowest pace in more than six years, according to a Bloomberg News survey of economists. Taiwan Premier Liu Chao Shiuan said on Wednesday his government will lower its 2009 economic growth forecast from 5.08 per cent, without giving a new figure.

The Taiwan dollar is dropping "because of the potential slump in the semiconductor industry and the fact that the Korean won has depreciated a lot," said Irene Cheung, a corporate director for local-markets trading at ABN Amro Bank NV in Singapore.

"As a big competitor in this industry, there is a need to catch up." The currency weakened as much as 1.3 per cent to NT$33.408 against the US dollar, the lowest level since May 2007, before trading at NT$33.29, according to Taipei Forex Inc.

Malaysia's ringgit fell to its lowest in almost two years as the prospect of a global recession and concern Argentina will default encouraged investors to shun emerging-market assets.

The ringgit slid as much as 0.9 per cent to 3.5768 per dollar, the weakest since December 2006, before trading at 3.5715 in Kuala Lumpur.

India's rupee slid as much as 1.2 per cent to 49.86 a dollar, an all-time low, while the Philippine peso touched 48.997, the weakest level since March 2007.

Elsewhere, the baht fell 0.4 per cent against the US currency to 34.66 and the Singaporean dollar dropped 0.1 per cent to S$1.5015. The Indonesian rupiah slipped 0.1 per cent to 9,985 and Vietnam's dong was unchanged at 16,850.