(Adds text, updates prices)
By Chandini Monnappa
Aug 7 (Reuters) - Most Asian currencies weakened against the
dollar on Tuesday as revived U.S. sanctions on Iran and
escalating trade tensions between Beijing and Washington
tempered appetite for emerging market foreign exchange.
The worsening trade war between China and U.S. supported the
dollar index against a basket of six major currencies,
which rose to a near three-week high of 95.515, before pulling
back slightly to 95.337.
The Philippine peso posted early gains on
higher-than-expected inflation, which supported views the
central bank will raise interest rates this week, but the
currency later slipped into negative territory.
Meanwhile, Washington reintroduced sanctions on Iran at 0401
GMT on Tuesday, amid opposition from Europe, China and India,
adding to investor concerns.
"It remains unclear if the U.S. would provide waivers for
countries looking to import Iranian oil, although the
administration may discuss requests on a case-by-case basis,"
Mizuho analysts said in a note.
China's yuan extended losses even as the
country's central bank took measures to rein in sharp declines
in the yuan.
The People's Bank of China (PBOC) on Friday introduced
requirements for banks to keep reserves equivalent at 20 percent
of their clients' dollar forward positions, effectively making
it more costly to short the yuan and helping it rebound from a
near 15-month low against the greenback.
China proposed retaliatory tariffs on $60 billion worth of
U.S. goods on Friday, as a senior Chinese diplomat cast doubt on
prospects of talks with Washington to solve their bitter trade
"Markets fear an escalation of a trade war more than the
PBoC's measure to discourage speculative RMB shorts," Mizuho
analysts said in a note.
The yuan has lost about 8.5 percent of its value against the
greenback since the end of March and is down 5 percent from the
start of the year.
Taiwan's dollar, the Thai baht and the
Singapore dollar were mostly unchanged.
South Korea's won and the Malaysian ringgit
weakened the most among regional currencies, inching 0.13
and 0.15 percent lower, respectively.
The Indian rupee was the only regional currency to
strengthen, trading up 0.1 percent. However, it remains the
worst performing currency in the region, having weakened more
than 7 percent so far this year.
"The overall view is that the rupee won't breach 70 levels
(to the dollar) compared to earlier views of 72. So that is
triggering some exporter dollar selling at the current levels,"
said a dealer at a private bank in India.
THE PHILIPPINE PESO
Philippine's peso reached its firmest since June 8
during the session before giving up gains to end 0.1 percent
Data showed that Philippine's annual inflation accelerated
in July and increased expectations for further policy tightening
The country's central bank, which is due to meet on Aug. 9,
raised its benchmark interest rate by 25 basis
points each in May and June, to tame inflation and shore up the
peso, which has been battered by concerns over a widening
current account deficit and capital outflows.
The following table shows rates for Asian currencies against
the dollar at 0527 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 111.320 111.4 +0.07
Sing dlr 1.369 1.3677 -0.07
Taiwan dlr 30.629 30.630 +0.00
Korean won 1125.800 1124 -0.16
Baht 33.320 33.31 -0.03
Peso 52.904 52.85 -0.10
Rupiah 14470.000 14465 -0.03
Rupee 68.823 68.88 +0.08
Ringgit 4.083 4.077 -0.15
Yuan 6.857 6.8519 -0.07
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 111.320 112.67 +1.21
Sing dlr 1.369 1.3373 -2.29
Taiwan dlr 30.629 29.848 -2.55
Korean won 1125.800 1070.50 -4.91
Baht 33.320 32.58 -2.22
Peso 52.904 49.93 -5.62
Rupiah 14470.000 13565 -6.25
Rupee 68.823 63.87 -7.20
Ringgit 4.083 4.0440 -0.96
Yuan 6.857 6.5069 -5.11
(Reporting by Chandini Monnappa in Bengaluru; additional
reporting by Suvashree D Choudhury in Mumbai; Editing by Sam