* Yuan weakness drags most regional currencies
* Investors still uncertain about Sino-U.S. talks
* Korean won, Indian rupee recoup most of Monday losses
(Adds text, updates prices)
By Rashmi Ashok
Aug 27 (Reuters) - Most emerging Asian currencies came under
pressure on Tuesday, with the yuan hitting a fresh 11-11/2 year
low as anxiety over the recent escalation in the Sino-U.S. trade
war persisted.
Some currencies strengthened, led by the Korean won and
Indian rupee, which pared much of their losses on Monday when
Asian units, except the baht, were weak.
Sentiment remained shaky even after U.S. President Donald
Trump on Monday flagged the possibility of a trade deal with
China and said he believed Beijing was sincere in its desire to
reach an agreement.
"It remains to be seen whether or not Trump's comments prove
to be green shoots or a false dawn over the prospects of a
meaningful US-China trade deal," said Han Tan, market analyst at
FXTM, a foreign-exchange trader.
"The risk-on sentiment may prove fleeting, given that new
and heightened tariffs are set to be imposed on US and Chinese
goods by next week," he added.
China's yuan weakened for the ninth straight session to a
fresh 11-1/2-year low, despite a brief rebound in early trade
following a much stronger-than-expected midpoint set by the
central bank. The onshore spot yuan CNY=CFXS weakened as much as 0.2% to
7.165 against the dollar.
The drop put pressure on other currencies, with the
Malaysian ringgit MYR= , Philippine peso PHP= and Singapore
dollar SGD= all trading weaker.
The won KRW=KFTC and rupee INR=IN , which both lost more
than 0.6% on Monday, were the big gainers.
The won added 0.5%, while the rupee strengthened to as much
as 71.710 against the dollar to crawl out of the 8-month trough
it hit on Monday.
YUAN PRESSURE VALVE
The yuan's fall to a 11-1/2 year low came despite the
People's Bank of China (PBOC) setting its official yuan midpoint
at 7.0810 per dollar, which was weaker than the previous fix but
firmer than expected.
The fix was seen as an official attempt to prevent the
currency from registering sharper losses.
FXTM's Han Tan said the PBOC is in a tricky spot, having to
navigate a fine line tolerating more yuan weakness in order to
offset economic headwinds.
The PBOC must ensure it doesn't cede too much ground to yuan
bears so as to trigger capital outflows, he said.
"Overall, the softer CNY is playing its role as a pressure
valve that eases China's economic pressures, hence the yuan is
expected to maintain an easing bias over the near-term."
This year, the yuan has shed slightly over 4% and is the
region's worst performer after the Korean won.
The following table shows rates for Asian currencies against
the dollar at 0524 GMT.
CURRENCIES VS U.S. DOLLAR
Currency Latest bid Previous day Pct Move
Japan yen 105.680 106.12 +0.42
Sing dlr 1.390 1.3884 -0.09
Taiwan dlr 31.388 31.451 +0.20
Korean won 1212.300 1217.8 +0.45
Baht 30.590 30.595 +0.02
Peso 52.460 52.38 -0.15
Rupiah 14240.000 14235 -0.04
Rupee 71.805 72.02 +0.30
Ringgit 4.206 4.201 -0.12
Yuan 7.161 7.1520 -0.12
Change so far in 2019
Currency Latest bid End 2018 Pct Move
Japan yen 105.680 109.56 +3.67
Sing dlr 1.390 1.3627 -1.94
Taiwan dlr 31.388 30.733 -2.09
Korean won 1212.300 1115.70 -7.97
Baht 30.590 32.55 +6.41
Peso 52.460 52.47 +0.02
Rupiah 14240.000 14375 +0.95
Rupee 71.805 69.77 -2.83
Ringgit 4.206 4.1300 -1.81
Yuan 7.161 6.8730 -4.02