Emerging market currencies weakened against a firmer dollar on Tuesday after US President Donald Trump doused hopes of a trade truce with China, while shares were mixed with mainland China stocks falling for a fourth day.
Four days ahead of a high-stakes meeting with Chinese President Xi Jinping, Trump said it was "highly unlikely" he would accept China's request to hold off raising tariffs, due to take effect on January 1.
The dollar rallied on the news, putting pressure on the MSCI index for currencies, which fell 0.2 percent, while the emerging stocks index was flat.
"The equities are not doing that badly but the currencies are hit," said Jakob Christensen, head of EM research at Danske Bank.
"The latest comments are a typical Trump negotiation strategy to put maximum pressure on the other side and there still remains hope for a ceasefire at the G20 meet later this week," Christensen said.
Trump said the next round of tariffs could also be placed on laptops and Apple Inc's iPhones imported from China, which are part of that $267 billion list of goods not yet hit by tariffs.
A stronger dollar weighed on most emerging currencies even as lower oil prices offered little respite for major crude importers like India and Indonesia. The yuan edged 0.12 percent lower.
Russia's rouble and stocks recovered from the previous day's losses when investors ditched Russian assets amid escalating tensions between Kiev and Moscow.
With Russia striving to reduce dependence on the US dollar, the country is ready to tap the global debt market by selling a seven-year Eurobond denominated in euros in December, a financial market source said.
The South African rand gained 0.3 percent as investors shrugged off renewed trade concerns.
Meanwhile, shares in both mainland China and Hong Kong were each down between 0.1 percent and 0.3 percent as investors remained on the sidelines amid concerns of trade war and a slowdown in global growth.
Bourses in Turkey and South Africa also fell but those of South Korea and Taiwan rose.
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