* China stocks, yuan up as COVID curbs ease * Czech c.banker Holub says likely to back 75 bps hike * Dollar slides as Fed
* China stocks, yuan up as COVID curbs ease
* Czech c.banker Holub says likely to back 75 bps hike
* Dollar slides as Fed bets ease
May 30 (Reuters) – Emerging market currencies rose to their
highest in a month on Monday as China inched towards ending a
two-month COVID-19 lockdown in its commercial hub and the dollar
weakened on easing bets of a more aggressive Federal Reserve.
The MSCI index of emerging market currencies
gained 0.6%, while stocks advanced 2.1% to their
highest in more than three weeks.
Shanghai authorities will cancel many conditions for
businesses to resume work from Wednesday, a city official said
on Sunday, and will also introduce policies to support its
battered economy.
The Chinese yuan rose to 6.6485, hitting a
one-week high against the dollar, while the blue-chip CSI300
and Hong Kong stock indexes gained 0.7% and 2%,
respectively.
“There is definitely more cautious optimism across markets,
but we have to be mindful that this is most likely a bear market
rally,” said Piotr Matys, senior FX analyst at In Touch Capital
Markets.
In central Europe, the Czech crown was flat
against the euro after central banker Tomas Holub said on Sunday
he was likely to support a further interest rate hike in June of
about 75 basis points.
“What’s important to note about the June meeting is that the
rate hike, which is the most likely scenario, could mark the end
of the tightening cycle,” said Matys.
“Instead of raising rates, it may try to strengthen the
Czech crown using its vast reserves. The strengthening of the
crown would be justified as inflation to a large extent is
driven by high prices of imported energy commodities,” Matys
added.
Meanwhile, the South African rand firmed 0.3% against
a weaker dollar.
The greenback eased as investors scaled back bets of
aggressive interest rate hikes by the Federal Reserve after last
week’s data signalled peaking inflation.
The Turkish lira extended losses to trade at 16.38
per dollar. The lira’s near 10% plunge this month and debt
market danger gauges at levels last seen during the 2008 global
crash have prompted investor concerns that a fresh crisis might
be brewing.
Russia’s rouble reversed some of last week’s
heavy losses as it retained support from capital controls and
Russia’s strong trade account.
Russia plans to settle its Eurobond obligations using a
mechanism similar to the scheme used to pay for Russian gas in
roubles, Finance Minister Anton Siluanov told the Vedomosti
newspaper.
For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Bansari Mayur Kamdar in Bengaluru; Editing by
David Holmes)
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