EMERGING MARKETS-US tariff threats loom over FX; forint slips ahead of rate decision

By Purvi Agarwal

Jan 28 (Reuters) - Most emerging market currencies weakened on Tuesday, pressured by a slight uptick in the dollar, while investors assessed U.S. President Donald Trump's latest tariff threats and awaited central bank decisions in the region.

Trump said on Monday he plans to impose tariffs on imported computer chips and some metal imports, among others.

A report also said Trump's pick for Treasury secretary, Scott Bessent, has been pushing for new universal tariffs on U.S. imports to start at 2.5% and gradually rise by the same amount each month.

That followed a last-minute deal with Colombia that averted steep tariffs and sanctions, dampening hopes that the new President would be more lenient on proposed tariffs.

The dollar index =USD rose on the day, while weakness persisted in currencies of heavily tariff-exposed economies such as Mexico MXN=. The peso lost 0.2% in early trading after it tumbled on Monday.

MSCI's gauge tracking global EM currencies .MIEM00000CUS was down 0.3%.

The Hungarian forint EURHUF= weakened 0.3% against the euro ahead of a rate decision, where the National Bank of Hungary (NBH) is widely expected to hold rates. Its stocks index .BUX was flat, but was trading near record high levels.

The forint underperformed its central European peers with a loss of about 6.5% against the euro in 2024, compelling the central bank to abandon rate cuts as concerns over a rebound in inflation also persisted.

Investors will "scrutinise" comments from the bank for clues on how long the pause in the easing cycle may last, said Piotr Matys, senior FX analyst at In Touch Capital Markets.

EM stocks were also pressured after a selloff triggered by the popularity of Chinese startup DeepSeek's AI model. Malaysia's stocks index .KLSE slipped to its lowest level since early August, while MSCI's EM stocks gauge .MSCIEF was off 0.1%.

"The dollar is broadly stronger following hawkish remarks from President Trump on trade tariffs," Matys said.

However, he said the dollar could struggle to regain momentum as DeepSeek has dented the image of U.S. exceptionalism.

Looming threats of tariffs and a consequential hawkish stance by the U.S. Federal Reserve have clouded the outlook for riskier EM assets, with domestic fiscal worries also adding to pressures.

The Fed is expected to hold rates this week, but investors will assess any further clues on this year's outlook at Chair Jerome Powell's press conference.

Chile's central bank decision is also due on the day.

Most other emerging European currencies were subdued against the euro.

South Africa's rand ZAR= was flat against the dollar, while the Turkish lira TRYTOM=D3 continued trading at record lows.

HIGHLIGHTS:

** India central bank's liquidity bazooka raises rate cut hopes

** Polish central banker Janczyk says rate cuts possible this year

** Bond bulls put Beijing on the horns of a dilemma

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For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB