The greenback had climbed to a more than one week high overnight on the back of economic weakness in Europe and uncertainty over Brexit, after British lawmakers voted against Prime Minister Theresa May's proposed deal with the EU. Regional currencies weakened on Wednesday despite having firmed in the last session after Chinese officials said they would introduce further measures to support the economy.
Sentiment was also dampened by reported comments from US Trade Representative Robert Lighthizer that he did not see any progress made on structural issues during the Sino-US trade talks in Beijing last week. Market participants have been concerned about the economic ramifications of the long-drawn US-China trade war due to a slew of weak export data from Asian countries including China, South Korea and Taiwan.
The Indonesian rupiah weakened as much as 0.5 percent in early trade, pressured by December trade data released on Tuesday showed the trade deficit at its widest for 2018 as exports contracted more than expected. The Korean won, the Chinese yuan and the Malaysian ringgit were marginally weaker against the greenback. The rupee traded sideways after government data on Tuesday showed the country's trade deficit narrow in December to its lowest in ten months.
The deficit shrank on a fall in gold imports, while exports remained flat, deepening concerns for Prime Minister Narendra Modi who wants to accelerate growth ahead of national elections due by May. Signalling further cooling in the economy, data out on Monday showed India's annual inflation dropped to an 18-month low in December. "Looking ahead, we are likely to witness an oncoming monetary easing in India," MIDF Amanah Investment Bank said in a note to clients.