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EM ASIA FX-Asian FX hobbled by absence of catalysts, lingering trade worries

(Removes extraneous words in headline)

* Philippine peso slips after trade deficit widens

* Lingering fears of Sino-U.S. trade war weigh on investors

* Malaysian 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.


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.


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.


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)