EMERGING MARKETS-Asian currencies, stocks decline as US tariff uncertainty looms

By Aaditya GovindRao and Roushni Nair

Feb 27 (Reuters) - Indonesia led the decline in Southeast Asian currencies and equities on Thursday, due to heightened uncertainty following U.S. President Donald Trump's ambiguous tariff threats against Europe and the timing of planned duties on Canada and Mexico.

The rupiah IDR=, which is on track for three sessions of losses, retreated 0.5% to 16,441 per U.S. dollar, its lowest since February 3. Equities in Jakarta .JKSE slipped over 2% to 6,458.4 points, its lowest since October 2021.

The MSCI gauge of emerging market currencies .MIEM00000CUS shed 0.2%, while a gauge of emerging Asian equities .MIMS00000PUS dropped 1.3%.

Overnight, Trump floated a 25% "reciprocal" tariff on European cars and other goods and signalled another month-long extension for looming levies on Canada and Mexico.

However, a White House official later said the previous March 2 deadline for the levies remained in effect, further increasing uncertainty about U.S. trade policy, and sending the dollar index =USD 0.2% higher. USD/

The shifting tariff messages have fanned worries about U.S. economic growth and inflation and that has caused the greenback to drop nearly 4% from a more than two-year high hit in January.

"Tariff imposition on these dates can undermine sentiments and lead to spikes in the USD, unless the implementation dates are rolled back again," said Christopher Wong, a currency strategist at OCBC.

The Malaysian ringgit MYR= fell 0.4% to its lowest since February 19, while the Thai Baht THB= lost 0.5% and the Korean won KRW=KFTC dropped 0.6%, after both countries' central banks cut interest rates earlier in the week.

"From a weighted average tariff rate perspective in the Asian space, South Korea and Thailand impose a higher average weighted tariff rate on the U.S. than the U.S. does on these countries," Wong said.

Reciprocal tariff rate adjustments from U.S. may potentially impact these countries more, and hence their currencies are subject to higher volatility from tariff announcements, Wong said.

Among regional stocks, the share market in Seoul .KS11 fell over 1%, dragged by losses in chipmaker SK Hynix 000660.KS, a main supplier for artificial intelligence darling NVDA.O, which saw choppy trading in extended hours even after strong first-quarter earnings.

Singapore stocks .STI were down 0.4%, on track for their fourth day of declines after scaling successive record highs a week earlier.

Equities in Taipei .TWII and Shanghai .SSEC declined 1.2% and 0.7%, respectively.

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