* S.Korean won suffers sharp fall after c.bank meet, but
* Sino-U.S. trade tension's keep investors on edge
* Indian rupee gains ahead of key data
(Adds text, updates prices)
By Nikhil Nainan
July 12 (Reuters) - Asian currencies were treading water on
Thursday, as a cautious backdrop left investors uncertain about
their bets a day after the latest U.S. trade tariff threat had
spread fresh tumult in financial markets.
The dollar index against a basket of six major currencies
was steady as U.S. inflation data reaffirmed expectations
that the Federal Reserve will hike rates two more times this
Although Chinese equities clawed back Wednesday's heavy
losses, the onshore yuan breached the key 6.7 level
against the dollar after the People's Bank of China (PBOC) set
the weakest fixing in nearly a year in the wake of the fresh
U.S. tariff salvo.
The yuan was 0.2 percent weaker at 6.690.
"It seems that the CNY has actually strengthened against the
China Foreign Exchange Trade System (CFETS) basket today.
Markets are taking this as a sign that the PBoC is keen to
anchor RMB sentiment rather than pursue depreciation," said Wei
Liang Chang, a FX strategist at Mizuho Bank.
However, "trade concerns are not likely to subside without
progress in negotiations, but at least any fears of a RMB-led
spillover into Asian FX have subsided."
The Indian rupee gained 0.2 percent to 68.645 per
dollar, ahead of key inflation and trade data expected later in
A Reuters poll predicted Indian inflation to have risen to a
near two-year high in June, driven by surging oil and food
prices - a development that would strengthen calls for more
monetary tightening by the Reserve Bank of India.
The Thai baht recovered and inched higher after the
Thai central bank chief said it had intervened to sooth rapid
moves in the local unit.
The currency declined as much as 0.2 percent to its weakest
level since October 2017 earlier in the session.
WON SLIDES AFTER BOK MEETING
South Korea's won slid 0.9 percent to 1130.2 per
dollar at one point, after the country's central bank kept rates
unchanged, as expected, but Governor Lee Ju-yeol signalled risks
to the economy from U.S.-driven trade tensions.
"The won I think was impacted somewhat from a more dovish
than expected tone from the BoK, with Governor Lee highlighting
concerns over trade disputes alongside potential downside risks
to growth," Mizuho's Wei Liang Chang said.
But the currency managed to recover some lost ground to
fetch 1,126.0 to the dollar, as a dissenting vote on the
seven-member board appeared to raise the chance of a rate hike
in the coming months.
The Bank of Korea downgraded its growth outlook to 2.9
percent this year from 3 percent previously. The won had fallen
to its weakest level since end-October last week.
CURRENCIES VS U.S. DOLLAR
Change on the day at 0543 GMT
Currency Latest bid Previous day Pct Move
Japan yen 112.260 112 -0.23
Sing dlr 1.362 1.3639 +0.12
Taiwan dlr 30.524 30.481 -0.14
Korean won 1126.000 1120 -0.53
Baht 33.270 33.29 +0.06
Peso 53.477 53.611 +0.25
Rupiah 14405.000 14380 -0.17
Rupee 68.645 68.77 +0.18
Ringgit 4.039 4.037 -0.05
Yuan 6.690 6.6750 -0.23
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 112.260 112.67 +0.37
Sing dlr 1.362 1.3373 -1.84
Taiwan dlr 30.524 29.848 -2.21
Korean won 1126.000 1070.50 -4.93
Baht 33.270 32.58 -2.07
Peso 53.477 49.977 -6.54
Rupiah 14405.000 13565 -5.83
Rupee 68.645 63.87 -6.96
Ringgit 4.039 4.0440 +0.12
Yuan 6.690 6.5069 -2.74
(Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Shri Navaratnam)