LONDON, Sept 4 (Reuters) - Emerging currencies resumed their slide on Tuesday and stocks struggled as simmering trade tensions and a strong dollar kept up the pressure while emergency measures in Argentina did little to sooth rattled investors.
MSCI's emerging market currency index slipped 0.3 percent after eking out small gains on Monday with the Indian rupee and Indonesian rupiah plumbing fresh record lows. Other major currencies such as Turkey's lira, , South Africa's rand, Russia's rouble and Mexico's peso also suffered losses against the dollar.
"Emerging market FX are set to suffer almost regardless of what they do, the only issue is how much," Michael Every at Rabobank wrote in a note to clients.
"As long as the U.S. continues to raise rates, keep corporate taxes relatively low, blow-out the fiscal deficit, sucking in U.S. dollar, and keep trade war fears on the radar, the dollar will remain on the front foot versus emerging markets."
Trade tensions have rattled global and emerging markets, with fears rising again after U.S. President Donald Trump's announcement over the weekend that there was no need to keep Canada in the North American Free Trade Agreement. This followed a report that Trump was prepared to quickly ramp up a trade war with China and could be ready to impose more tariffs on Chinese imports as soon as Thursday.
Manufacturing activity data on Monday showed signs that many emerging markets were starting to feel the pinch from the intensifying trade dispute.
Adding to the woes was the turmoil in Argentina, where on Monday President Mauricio Macri announced new taxes and steep cuts to spending in an "emergency" bid to balance next year's budget and persuade the International Monetary Fund to speed up a $50 billion loan programme.
However, the peso - which has weakened more than 50 percent against the dollar since the start of the year - took another leg lower in the wake of the announcement as the country's finance minister was headed for Washington to start talks with the IMF.
In Turkey, the lira extended Monday's falls, weakening 0.5 percent as the central bank acknowledged it had seen a significant deterioration in inflation trends.
The comments followed hot on the heels of a statement on Monday, where the central bank signalled it would take action against "significant risks" to price stability, a rare move to calm financial markets after inflation surged to its highest in nearly a decade and a half.
Emerging stocks fared more mixed with the broader index snapping a four day losing streak to nudge 0.1 percent higher. The gains came thanks to a turnaround in Chinese markets, where mainland indexes reversed earlier losses to rise more than 1 percent.
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Reporting by Karin Strohecker, graphic by Ritvik Carvalho