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Hungary rate decision at 1200 GMT

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Chinese yuan slips from three-week highs

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Canada to impose 100% tariff on Chinese EVs, including

Teslas

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EM stocks down 0.3%, FX off 0.2%

By Shashwat Chauhan

Aug 27 (Reuters) - Most emerging market currencies were

muted on Tuesday, as sentiment remained fragile with investors

assessing the risks from rising tensions in the Middle East

following Hezbollah and Israel's clash over the weekend.

As of 0830 GMT, MSCI's index for emerging market stocks

slipped 0.3%, while a gauge for currencies

was down 0.2%, easing from record high levels.

The Chinese yuan slipped from three-week highs

hit in the last session to trade at 7.1296 per dollar. In

offshore trade, it was last down 0.1%.

Chinese shares also came under pressure,

with stocks of EV makers and steel producer down after Canada

said on Monday it would impose a 100% tariff on imports of

Chinese electric vehicles and a 25% tariff on imported steel and

aluminium from China.

Hungary's forint slipped 0.1% against the euro

ahead of a local interest rate decision later in the day.

The Hungarian central bank is expected to pause its easing

cycle after 15 rate cuts, keeping its base rate at 6.75%, a

Reuters poll indicated, with a few outlying forecasts pointing

to further easing.

"Despite a surprising cut in July, we do not anticipate any

changes ... the July inflation rate was higher than expected,

which supports our view of stable rates," analysts at Erste

Group wrote in a note.

Most EM currencies saw sharp gains at the end of last week

when Federal Reserve Chair Jerome Powell said on Friday "the

time has come" to lower interest rates, pushing the dollar to

its lowest level so far this year.

San Francisco Fed President Mary Daly on Monday backed that

claim.

However, EM assets, generally considered as risky, paused as

investors measured the risks of escalating geopolitical worries

in the Middle East.

Hezbollah had launched hundreds of rockets and drones at

Israel early on Sunday, and Israel's military said it struck

Lebanon with around 100 jets to thwart a larger attack, in one

of the biggest clashes in more than 10 months of border warfare.

Hasnain Malik, head of equity research at Tellimer Research

noted that "there are clear indications that this escalation

remains calibrated."

In Asia, the Philippine peso led losses with an 0.5%

against the dollar, while South Korean won shed 0.3%.

Russia's rouble gained 0.4% against the greenback,

while South Africa's rand was largely stable at 17.77

per dollar.

Bourses in emerging Europe were mixed, though Hungary's

benchmark lagged with a 0.7% fall.

HIGHLIGHTS:

** IMF reaches staff-level deal for Liberia on $209 million

new credit facility

** China's PDD suffers $55 bln market cap wipeout after

flagging an uncertain market

** Russia pounds Ukraine with missiles, drones for second

day in row, Kyiv says

** IMF softens some conditions on Egypt's $8 billion finance

package

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see