Currencies bounce against wobbly dollar, stocks hit one-week high
Most major emerging market currencies rose against the dollar and stocks hit a one-week high, while Turkey's lira was little changed ahead of its central bank seen keeping policy rate unchanged. ...

Dec 22 (Reuters) - Most major emerging market currencies
rose against the dollar and stocks hit a one-week high, while
Turkey's lira was little changed ahead of its central bank seen
keeping policy rate unchanged. The dollar index weakened after data showed U.S.
consumer confidence rose to an eight-month high in December as
the labour market remained strong, adding a new shine to riskier
emerging market assets. High-yielding favourites including South Africa's rand
and Mexico's peso firmed about 0.4% each, as
markets count down days till the year end amid thinning volumes. The MSCI's index for EM currencies was a
touch higher on Thursday, but down 4.6% for the year as tighter
monetary conditions across the world made it harder to borrow
money and hawkish messages from the U.S. Federal Reserve kept
the greenback in favour. Still, not all developing market currencies were equally hit
as most Latin American units benefited from their exposure to
commodities as prices of oil, base and precious metals surged
for better part of 2022. The MSCI's index for Latam FX
is up 15.6% this year, its first rise in three
years. Emerging market stocks enjoyed a bounce, last up
1.1% amid broader improvement in risk appetite. Turkish stocks
added 1%, while Russian equities gained 0.7%. Developing world assets have also been hit this year by
worries of a slowdown in China as it now embarks on less
restrictive COVID policies amid inadequate vaccinations. "The decline in U.S. interest rates and mushrooming global
economy tied to China provided tailwinds helping propel EM debt
and equities, but this has been working in reverse in
2022–tailwinds are now headwinds," said Peter Marber, head of
emerging markets at Aperture Investors. But Marber argues, EM debt, equities and currencies have
cheapened dramatically in 2022, offering investors an
opportunity to beef up exposure at bargain prices. The Turkish central bank is expected to keep its benchmark
lending rate at 9% later in the day after it said last month
that it decided to end the easing cycle, having managed to cut
rates to match with President Tayyip Erdogan's call for
single-digit rates. The lira was flat. Russia's rouble fell to its weakest since
late April 72 against the dollar on mounting fears over the
impact of sanctions on Russian oil and gas. The currency is on
track to fall more than 15% this month.
For GRAPHIC on emerging market FX performance in 2022, see URL
For GRAPHIC on MSCI emerging index performance in 2022, see URL For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by
Shailesh Kuber)