(Removes extraneous words in headline)
* Philippine peso slips after trade deficit widens
* Lingering fears of Sino-U.S. trade war weigh on investors
* Malaysian c.bank set to hold rates; ringgit leads regional
By Nikhil Nainan
July 10 (Reuters) - Most Asian currencies struggled for
traction on Tuesday as the backdrop of an U.S.-driven
international trade war and the absence of positive catalysts
kept investor sentiment largely in check.
The Philippine peso, which has been hovering around 12-year
lows, came under more strain as the nation's trade deficit
widened further in May.
"Trade war risk is likely to linger in the background as
countries start to introduce measures to prepare for tariffs
staying for a potentially longer-than-expected period," Mizuho
said in a note.
The dollar's index against a basket of six major currencies
hovered around June's lows, up just a touch on the day at
94.181, mainly capped by disappointing wages growth in an
otherwise solid U.S. payrolls report on Friday.
The Chinese yuan pushed higher for the second
day, up 0.1 percent to 6.605 on the dollar, helped by the
combination of a firmer official yuan fixing, a broadly softer
greenback and some easing of Sino-U.S. trade tensions.
While both China and the United States hit each other's
goods with tariffs on Friday, the focus now is on whether the
dispute would ratchet up further or if officials in Beijing and
Washington will find a way to ease off the tense trade
Data earlier in the day showed China's producer inflation, a
gauge of industrial profitability, rose by a
stronger-than-expected 4.7 percent in June. The worry is that an
uptick in factory-gate prices could put more pressure on the
country's exporters as trade dispute with the U.S. prolongs.
The Indian rupee eased 0.1 percent to 68.790.
A Reuters poll showed inflation is likely to rise to a near
two-year high in June, a development that would strengthen calls
for more monetary tightening by the central bank.
DEFICIT WOES HIT PHILIPPINE PESO
The Philippine peso gave up 0.2 percent to 53.483
after data showed the country's trade deficit widened in May to
a five-month high as exports shrunk.
The Import-driven trade gap is expected to worsen the
country's current account deficit this year, and cast further
pressure on the peso, which is one of Asia's worst performers so
far this year.
"The deterioration in the external position in the
Philippines is one of the key causes for the peso weakness and
with no signs of any improvement in the trade balance, I expect
the peso to remain under pressure," said Khoon Goh, ANZ's head
of Asia research.
Goh tips the peso to weaken to 54 on the dollar by year-end.
The Philippine central bank expects a current account
deficit of $3.1 billion at the end of the year, wider than an
earlier forecast of $700 million, and higher than the previous
year's $2.52 billion gap.
RINGGIT OUTPERFORMS BEFORE C.BANK MEET
The Malaysian ringgit rose to 4.009 per dollar, a day
ahead of Bank Negara Malaysia's policy meeting, where interest
rates are expected to remain unchanged.
As a net oil exporter, rising prices "will benefit exports
for Malaysia and hence that's helped to provide an additional
kick for the ringgit today," ANZ's Goh said.
Analysts say that with the abolishment of the goods and
services tax, there's little inflationary pressure to trouble
Governor Nor Shamsiah Mohd Yunus in his first policy meeting,
even as other regional central banks hiked rates to bolster
their respective currencies.
The ringgit has outperformed its Southeast Asian peers in
the region, amid an exodus from emerging markets as rising trade
tensions have turned investors risk-averse.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 111.180 110.84 -0.31
Sing dlr 1.354 1.3566 +0.18
Taiwan dlr 30.360 30.386 +0.09
Korean won 1115.400 1112.2 -0.29
Baht 33.110 33.13 +0.06
Peso 53.483 53.389 -0.18
Rupiah 14350.000 14320 -0.21
Rupee 68.790 68.72 -0.11
Ringgit 4.009 4.025 +0.40
Yuan 6.605 6.6117 +0.10
Change so far in 2018
Currency Latest bid End 2017 Pct Move
Japan yen 111.180 112.67 +1.34
Sing dlr 1.354 1.3373 -1.24
Taiwan dlr 30.360 29.848 -1.69
Korean won 1115.400 1070.50 -4.03
Baht 33.110 32.58 -1.60
Peso 53.483 49.977 -6.56
Rupiah 14350.000 13565 -5.47
Rupee 68.790 63.87 -7.15
Ringgit 4.009 4.0440 +0.87
Yuan 6.605 6.5069 -1.48
(Reporting by Nikhil Kurian Nainan in Bengaluru
Editing by Shri Navaratnam)