EMERGING MARKETS-Asian currencies weaken on Trump tariff worries, Fed policy in focus

By Shivangi Lahiri and Himanshi Akhand

Jan 27 (Reuters) - Thailand's baht slipped the most among broadly weaker Asian currencies on Monday as the dollar firmed on renewed worries about U.S. President Donald Trump's tariff plans, while investors awaited the Federal Reserve's policy decision.

The baht THB=TH fell up to 0.4% and the Indian rupee INR=IN inched 0.2% lower.

The MSCI gauge of emerging market currencies .MIEM00000CUS dipped as much as 0.5% in its weakest trading session in more than five weeks.

The dollar strengthened after Trump threatened Colombia with retaliatory levies and sanctions as part of his immigration crackdown. FRX/

However, later on Sunday, after the South American nation agreed to accept military aircraft carrying deported migrants the White House said it would not carry out the threat.

While fears of tariffs, especially on Chinese goods, eased slightly last week boosting most Asian currencies, DBS analysts warned that a week without tariffs being imposed should not be seen as "a welcome marker" for what might lie ahead.

"Given that Trump has talked about his belief in the potency of tariffs, actual and threatened, for four decades, we are sceptical that this four-year term would somehow begin and end with minimal application of his favourite tool," they said in a note.

The Chinese yuan CNY=CFXS fell 0.3%. An official factory survey showed that China's manufacturing activity unexpectedly contracted in January to its weakest since August.

Regional stock markets were also weaker, with Kuala Lumpur .KLSE slipping around 0.4%, and Manila .PSI dropping 0.5% to their lowest in over seven months.

Global investors will be focusing this week on the Federal Reserve and how policymakers are likely to react after Trump said he wants the central bank to cut interest rates.

The Fed is expected to keep rates unchanged when it concludes its two-day meeting on Wednesday.

Asian investors will also be keeping an eye on growth data from the Philippines and Thailand's manufacturing data, due later in the week.

Trading across the region is expected to remain quiet as many bourses have holidays, mostly for the Lunar New Year. Among them, South Korea, Indonesia, and Taiwan were already closed on Monday.

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