By Anneken Tappe and Mike Bird

Turkey's lira falls after Erdogan win

Trade-war worries remained front and center on Monday, following President Donald Trump's latest tariff salvos against some of its largest global partners. In response, traditional haven currencies like Japan's yen strengthened.

Currencies considered safe in times of global uncertainty have outperformed due to their high liquidity versus alternatives perceived as riskier. The U.S. dollar at times also functions as a haven, though it seemingly didn't on Monday, when the buck added on from a 0.3% loss last week. The ICE U.S. Dollar Index was last down 0.1% at 94.394.

On Sunday, President Trump said that the U.S. would meet any duties from trade partners with additional levies. Last week, the European Union imposed reciprocal tariffs on U.S.-made goods.

(https://twitter.com/realDonaldTrump/status/1010978975391322112)

The yen was up 0.3% against the greenback on Monday, with one dollar buying Yen109.65.

Meanwhile, the Australian dollar slipped 0.3% to $0.7419. The Aussie is seen as a proxy for China, which is at the center of the U.S.-led trade spat, due Australia's deep trade ties with Beijing.

The buck also gained against China's yuan, buying 6.5338 onshore and 6.5463 offshore , up 0.4% and 0.6% respectively.

Read:Here's why a trade-war selloff won't spark intervention in China's yuan (http://www.marketwatch.com/story/theres-no-trade-war-panic-in-chinas-yuan-2018-06-19)

The Wall Street Journal reported that the PBOC on Sunday indicated that it would reduce the amount of reserve banks are required to keep with the central bank, freeing up more than $100 billion--signaling a loosen of its policies which could weigh on its monetary unit. That said, the yuan has maintained its strength against the buck compared against the performance of other major currencies against greenback.

Elsewhere, Turkey's lira dropped against the dollar and the euro in the wake of a victory for incumbent President Recep Tayyip Erdogan in Sunday's presidential and parliamentary elections. Erdogan, who was seen as the unfavorable candidate for markets, receiving 52.5% of the vote (http://www.marketwatch.com/story/turkeys-erdogan-wins-sweeping-presidential-victory-extends-grip-on-power-2018-06-24), enough to avoid a second runoff election. Investors are concerned about Turkey's high double digit inflation, its reliance on foreign and particularly dollar-denominated funding, as well as the independence of its central bank under Erdogan's next administration.

One dollar last bought 4.6948 lira, up from 4.5373 earlier Monday, while the euro bought 5.4859, up versus 5.2812 earlier in the session.

Analyst at UniCredit in a Monday research note wrote "in terms of our preview of the election, the current result coincides with the bearish market scenario as it assumes that macroeconomic policymaking will turn poor once again as the president puts pressure on both the government and the central bank to reflate the economy further."

Researchers there attributed earlier gains to unwinding of investors who had placed bearish bets that the lira would weaken following the vote: "Accordingly, beyond the short-covering rally based on reduced uncertainty, the lira is likely to be vulnerable if our assumption that the current 'checks and balances' on policy will be eroded further is correct," referencing Erdogan's intension to control the country's central bank and monetary policy (http://www.marketwatch.com/story/heres-how-turkeys-currency-woes-could-undermine-erdogans-re-election-bid-2018-05-24).

(END) Dow Jones Newswires

June 25, 2018 09:30 ET (13:30 GMT)