Currencies drop, stocks mixed with tariff deadline in sight, US data eyed
IMF to update its World Economic Outlook
MSCI EM FX, stocks indexes off 0.3% each
By Purvi Agarwal and Ankita Yadav
July 29 - Most emerging market currencies fell against a stronger dollar on Tuesday while stocks were mixed as investors awaited a slate of upcoming economic data, while the U.S. tariff deadline drew closer.
MSCI's gauge tracking emerging market currencies fell 0.3% to its lowest level since late June, in a third session of declines.
The dollar index rose 0.2%, hovering near its five-week high, after surging 1% in the previous session.
Markets rewarded the greenback after the United States clinched a key trade deal with the European Union days ahead of the August 1 deadline, while talks with China continued.
Most currencies in Asia weakened against the dollar, and so did South Africa's rand, which fell 0.4% and was on track for its fourth session of losses. Turkey's lira was little changed.
Currencies in emerging Europe weakened against the euro, as optimism over trade deals faded, with investors concerned about its implication for Europe.
The Hungarian forint was down 0.8% and set for its steepest one-day decline since April 11. The government slashed its 2025 growth forecast to 1%, down from 2.5%, prolonging a recovery from a 2022 inflation surge.
Poland's zloty slipped 0.4%. Its prime minister said that U.S. tariffs on European products could cost Poland around 8 billion zlotys , per preliminary estimates.
Russia's rouble fell 1.3% against the dollar, over-the-counter market data showed, a day after Trump shortened his deadline for Russia to end its war in Ukraine or face tariffs.
Trump on Monday said that trading partners that do not negotiate separate deals would soon face tariffs between 15% to 20%, well above the previously threatened 10%.
Emerging markets have found themselves in the crosshairs of Trump's tariffs, with duties threatened on Brazil, Mexico, the BRICS group of which Brazil and South Africa are members, and many Asian countries.
"We will settle with just over 15% tariffs... while negative from a macro point of view, the world can live with these levels of tariffs," said Mohit Kumar, chief European economist at Jefferies.
"Eventually, it boils down to the data and we could see weakening in August data."
The impact of tariffs has started to show in U.S. inflation data, and investors will scrutinize economic data scheduled through the week for more such signs.
Regional stocks were broadly higher, with Poland and Romania bouncing back 1% and 0.2% respectively, while South African stocks were up 0.6%.
Still, MSCI's index tracking global EM stocks was down 0.3%, with declines in some heavyweight Asian stocks weighing.
Also due on the day is the International Monetary Fund's outlook on the global economy.
** Indonesia's FDI drops 6.95% y/y in Q2, biggest fall since 2020
** Bank of Korea board members saw more interest rate cuts necessary, minutes show
** Turkey's gross reserves rebound amid tight monetary policy
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
This article was generated from an automated news agency feed without modifications to text.
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