“We know the Fed is watching the labor market very closely and the data could be a trigger that they will eventually taper down QE3,” said Gundy Cahyadi, an economist at Oversea-Chinese Banking Corp. in Singapore. “The China data continue to point towards weaker global growth.”

China's industrial output climbed 9.2 percent from a year earlier in May, less than the 9.4 percent growth forecast in a Bloomberg survey of economists, exports rose the least in 10 months and factory-gate prices fell for a 15th month, weekend reports showed. Malaysia's overseas shipments contracted 3.3 percent in April, a third straight decline, according to official figures released June 7.

Fund Flows
Global funds pulled $3.1 billion last week from equities in Indonesia, the Philippines, South Korea, Taiwan and Thailand, exchange data show. The Asia Dollar Index, which tracks the region's 10 most-used currencies excluding the yen, slid 1.3 percent in the past month.

One-month non-deliverable forwards on the rupiah declined 2.1 percent to 10,343 per dollar and earlier touched 10,408, the weakest level since August 2009, data compiled by Bloomberg show. They were at a 5.1 percent discount to the exchange rate quoted by banks in Indonesia, the biggest gap since September 2011. The spot rate fell 0.1 percent to 9,814 in Jakarta, according to prices from local lenders.

Eoin Treacy's view My view – Do you remember those heady days in the 1990s when the Nasdaq was attracting money from investors all over the world, the US government was running surpluses and even retired the 30-year bond and the Treasury's “strong Dollar policy” was credible? At the time the US Dollar was one of the world's strongest currencies and the Dollar Index had been rallying consistently for 6 years when it peaked in 2001.

Fast forward a decade and the US economy has been through two stock market crashes, government debt has ballooned, (the 30-year was reintroduced in 2006) and economists spent much of the last few years agonising over the twin deficits and unfunded liabilities. The Dollar Index gave up more than 40% of its value before hitting a meaningful low in 2008 and has exhibited base formation characteristics since.

As the Dollar Index peaked more than a decade ago Asian and commodity currencies began to outperform. The Asia Dollar Index bottomed in 1998 and trended higher from 2001. It encountered resistance in the region of 120 from 2011 and continues to range below that level in a marked loss of momentum.

Considering the loss of competitiveness a number of Asian countries are experiencing from the devaluation of the Yen, the incentive to devalue their own currencies is quite compelling. The Singapore Dollar, Korean Won, Thai Baht, Taiwan Dollar, Indonesian Rupiah, Philippine Peso and Indian Rupee have all at least lost momentum against the US Dollar and a number of breaking medium-term uptrends. The Indian Rupee hit a new all-time low against the Dollar today.

Concern regarding China's growth trajectory has also had an impact on the outlook for commodity linked currencies. The US Dollar has strengthened against the Australian Dollar, New Zealand Dollar, Brazilian Real, South African Rand, Chilean Peso, Colombian Peso and Russian Ruble. While somewhat overbought in the short-term clear downward dynamics would be required to check momentum.

While the Dollar was among the weakest currencies in the world over the last decade, that is unlikely to be the case in the next decade.