Emerging market currencies slipped on Monday, extending their sharp losses against a firm dollar ahead of U.S. inflation data later this week, while the Polish zloty slid against the euro to its lowest level since October.
The zloty fell 0.4% after central banker Joanna Tyrowicz said keeping interest rates at current levels is a “mistake”. Last week, the National Bank of Poland left its main interest rate unchanged, like regional peers, remaining in wait-and-see mode as it assesses the damage to the economy caused by the war in Ukraine.
“Compared to Europe and the rest of CEE, Poland’s central bank sounds relatively more dovish,” said Michael Wang, deputy portfolio manager at Mirabaud Asset Management. Hungary’s forint slipped 0.2% to 387.54 against the euro.
There is a good chance that Hungary’s inflation peaked in January, National Bank of Hungary Deputy Governor Barnabas Virag was quoted saying in a media report. Meanwhile, the Czech crown edged 0.1% higher after Vice-Governor Jan Frait was quoted saying the Czech central bank can hold interest rates at current levels if the economy develops as expected and inflation continues to moderate.
Overall, the MSCI’s index for emerging market currencies weakened 0.3% against the dollar as markets awaited key U.S. inflation data on Tuesday for further cues on the Federal Reserve’s rate hike path. “Also, the news that the U.S. shot down more balloons over its airspace is raising concerns over geopolitical tensions,” said Wang.
South Africa’s rand slid 0.5% against the dollar tracking global market moves, while the Turkish lira was flat. Russia’s rouble hovered near its lowest level since April at 73.65 against the greenback, extending losses despite huge currency interventions by the government.
China’s yuan hit its weakest level in five weeks as data from South Korea compounded concerns about Asia’s export growth. Stocks in emerging markets slipped 0.3%.
Turkey’s stock index remained suspended until Feb. 15 in the wake of last week’s earthquake with death toll climbing to over 33,000. Pakistani bonds extended losses even as a Pakistani official said talks between the International Monetary Fund and the cash-strapped South Asian country will resume virtually on Monday after 10 days of face-to-face discussions in Islamabad ended without a deal.
Shares of India’s Adani Group companies dropped again with spotlight on the country’s market regulator after sources said it is set to brief the federal government on its investigation into the conglomerate’s shelved share sale.
(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
