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EM ASIA FX-Most Asian currencies weaken on trade war, Iran sanctions

(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.


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

this week.

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.


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