SINGAPORE: Most emerging Asian currencies eased on Wednesday as investors cut risky bets after the Federal Reserve failed to announce new initiatives to bolster US growth and offset concerns about the euro zone debt crisis.

Investors are aware that Asian central banks could sell dollars, but are cautious that this intervention may happen when there's very little clarity of what measures will be taken to solve the two-year-old European debt crisis.

The Fed warned on Tuesday that turmoil in Europe presents a big risk to the US economy, Asia's major export market.

German Chancellor Angela Merkel rejected talk of raising the funding limit of a planned permanent bailout fund to backstop the currency bloc above 500 billion euros. That forced investors to continue to reduce holdings in riskier assets including Asian stocks and currencies, although they are keeping an eye on Italy's bond sale later in the day.

“Another much vaunted agreement in Europe seems to be unravelling, and with the interest rate premium for European debt over US eroding, the support for EUR seems to be ebbing away,” said Chris Gothard, head of FX for Brown Brothers Harriman in Hong Kong.

“Our view of EUR under 1.30 this month now suddenly looks more likely than not,” said Gothard. “Though there has been some decent data out of the US, there is a gloomy sentiment with European travails continuing and some nervousness about China. That is hurting the AUD and the Asian EM currencies.”

Emerging Asian currencies are expected to slide more in short-term, especially foreign investors are likely to absorb dollars to repatriate or to take profits from the region before the year-end, dealers and analysts said.

The Indian rupee hit a record low for a third consecutive session on Wednesday. The won may suffer more slide than other emerging Asian currencies as South Korea has similar problems to India in terms of a heavy short-term foreign debt load and dependence on European bank financing, some analysts said.

Reflecting the view, offshore funds sold the local currency and foreign investors continued to unload Seoul stocks. But market players are wary of possible dollar-selling intervention by the foreign exchange authorities and exporters are likely to buy the won on dips for settlements, especially when it weakens past 1,160 per dollar.

“I don't think we will see levels higher than 1,160,” said a senior foreign bank dealer in Seoul. “Above the level, exporters or the authorities will come to the market unconditionally.”

The Philippine peso slid as investors rushed to cover dollar-short positions and on fixing-related dollar demand. Some traders added dollar-long positions, while others are looking to buy the peso on dips.

“Right now, I prefer to sell at the rallies,” said a European bank dealer in Manila, adding market players appeared to hold dollar-long positions to clear.

The Singapore dollar hovered around the 76.4 per cent Fibonacci retracement of its appreciation between late November and early December.

If the local dollar clears the retracement of 1.3060 versus the greenback, it may head to the next resistance at 1.3151, the high on November 25. After the resistance, it is seen testing 1.3200. Players are looking to sell the city-state's currency on rallies based on continuous outflows from emerging Asia before the year-end and sustained worries about the euro zone's debt crisis.