EM currencies slip ahead of Fed, China data lifts stocks – 2024-03-18

March 18 (Reuters) – Most emerging market currencies
slipped on Monday as the dollar steadied ahead of the U.S.
Federal Reserve’s policy decision this week, while China led
gains in developed world stock markets after upbeat economic

The Russian rouble was an exception in
currency markets, firming 1% to 91.8 against the dollar and
bouncing off a three-month low versus the euro.

President Vladimir Putin won a record post-Soviet landslide
in Russia’s election on Sunday, cementing his already tight grip
on power in a victory he said showed Moscow had been right to
stand up to the West and send its troops into Ukraine.

The rouble had weakened steadily in the week leading up to
the election, but the ultimate impact on the Russian market was

Overall, with the dollar trading near two-week highs
against major peers, the Turkish lira fell to a
record low of 32.39 per dollar and the South African rand

Most EM currencies have struggled this year after a strong
2023 as investors grapple with uncertainty around when U.S.
interest rates will start falling as data points to a resilient
U.S. economy.

Recent inflation data prompted investors to pare bets of
quick and big rate cuts from the Fed this year. The focus on
Wednesday will be on whether Fed policymakers change their
projections of rate cuts for the year.

“The chart of expectations will be closely scrutinised for
any more conservative tweaks, which could spark negative
sentiment,” Susannah Streeter, head of money and markets,
Hargreaves Lansdown, said.

Central banks in Britain, Australia, Norway, Switzerland,
Mexico, Brazil and Indonesia are due to meet this week, with
most expected to stand pat on rates.

The Turkish central bank’s policy decision is due on
Thursday amid growing calls for a rate hike after data showed
annual inflation rate climbed to 67% in February, exceeding
economists’ expectations.

The lira has weakened more than 9% this year after a
near-37% slide in 2023, further stoking import prices.

The MSCI’s gauge of EM equities rose 0.4%, with
Shanghai closing up about 1% after numbers
showed China’s factory output and retail sales beat expectations
in the January-February period, marking a solid start for 2024
and offering some relief to policymakers.

For GRAPHIC on emerging market FX performance in 2024, see
For GRAPHIC on MSCI emerging index performance in 2024, see

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see
(Reporting by Sruthi Shankar in Bengaluru; Editing by Mrigank

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