EMERGING MARKETS-Firm dollar weighs on Asian currencies, Thai baht top loser

Updates for afternoon trading

By Rajasik Mukherjee and Roushni Nair

Feb 25 (Reuters) - Most Asian currencies inched lower on Tuesday as global tariff worries underpinned the dollar, with Thailand's baht leading the decline ahead of a central bank meeting, while the South Korean won held its own after the Bank of Korea cut rates as expected.

The baht THB=TH fell 0.6% and was on track for its worst session in more than a week. The Indonesian rupiah IDR=, one of the region's worst performing currencies so far this year, depreciated 0.4%. Taiwan's dollar TWD=TP and the Indian rupee INR=IN retreated 0.3% each.

The MSCI index of emerging market currencies .MIEM00000CUS ended a three-day rally, falling as much as 0.2% in its biggest intraday percentage loss in a week.

The dollar index =USD recovered from its lowest level in more than two months touched at the start of the week, boosted by safe-haven demand following U.S. President Donald Trump's announcement that tariffs on Mexico and Canada would proceed as planned. USD/

"Announcements about tariffs involving the U.S., China, or Europe could strengthen the dollar further, but uncertainty makes it hard to predict, as the market is bracing for potential negative news, keeping the dollar at high levels," said Jessica Amir, market strategist at Moomoo Australia.

In South Korea, the won KRW=KFTC remained largely stable after the central bank cut its benchmark interest rate by a quarter of a percentage point. The move was widely anticipated to support an economy impacted by political turmoil and the fallout from Trump's tariff policies.

"There are good reasons to expect the central bank to cut rates again over the coming months to support the struggling economy," said Gareth Leather, a senior economist with Capital Economics.

In Thailand, markets were volatile a day ahead of a central bank policy meeting, where it is expected to keep rates steady in line with its regional counterparts, Indonesia and the Philippines.

Stocks in Bangkok .SETI fell 1.5%, hitting their lowest since 2020. The market has lost nearly 4% in the last six sessions, becoming the region's worst performer so far in 2025.

Meanwhile, the Trump administration is planning stricter semiconductor restrictions and urging its allies to tighten their controls on China's chip industry.

In Hong Kong, the Hang Seng Tech Index .HSTECH dropped by up to 2%. It has surged more than 20% since the beginning of the month, driven by the launch of low-cost AI model DeepSeek and boosted by Chinese President Xi Jinping's rare meeting with the country's top business leaders.

Tech-heavy stock indexes in Taiwan .TWII and South Korea .KS11 shed 1% and 0.4%, respectively. Indonesian stocks .JKSE lost 2.4%.

HIGHLIGHTS:

Nvidia's H20 chip orders jump as Chinese firms adopt DeepSeek's AI models, sources say

India GDP growth likely rebounded in Oct-Dec on government spending push