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EM stocks down 0.8%; stocks down 0.3%

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Dollar slides as Trump escalates attack on Fed

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India stocks fall on US tariff worries

By Pranav Kashyap

Aug 26 (Reuters) - Most emerging market assets retreated

on Tuesday as President Donald Trump took fresh aim at the

Federal Reserve, rattling sentiment ahead of rate decisions in

Hungary and Poland.

Hungarian equities fell 0.3% and the forint

slid 0.7% to a near three-week low ahead of a widely expected

hold from the central bank, as inflation was still running above

its 2%-4% band against the backdrop of a sputtering economy.

"There is no discussion of rate cuts here at present... the

market will be watching for any changes in guidance," said

Frantisek Taborsky, EMEA FX & FI strategist at ING.

Geopolitical strains, trade tensions, and weaker growth

projections for 2025-2026 have fostered caution across the

region.

In Poland, Warsaw stocks hit a three-week low and

the zloty touched a two-week low as markets braced for

the central bank's decision.

Both central banks face delicate trade-offs. Hungary was

prioritizing inflation control and currency stability with

higher rates, while Poland has adjusted policy more gradually

and signaled one more cut could be on the table this year.

Meanwhile, global sentiment soured after Trump said he was

firing Fed Governor Lisa Cook, a fresh jab that further

undermines confidence in the Fed's independence and U.S. assets.

There were some bids into safe havens as the news muddied

the policy outlook and stoked uncertainty over a rate cut next

month. Gold hit a two-week high, while the dollar

pared losses after an initial drop.

EM currencies and stocks fell across the board, with stocks

in the Philippines tumbling more than 2% to their lowest

level since April 23.

"In the short term, the market appears crowded. Recent moves

have largely been reactionary to individual events or data

releases," said Daniela Hathorn, senior market analyst

at Capital.com.

"Yet these gains tend to fade as the market resets,

underscoring the lack of sustained momentum. This split picture

leaves investors uncertain about whether to lean toward risk

assets like equities... or to seek safety in gold."

Meanwhile, Indian equities shed 0.6%, and

the rupee hit a near one-month low after a U.S. Homeland

Security notification confirmed Washington will impose an

additional 25% tariff on all Indian-origin goods from Wednesday.

The Russian rouble rose 0.5% while some of Ukraine's

international dollar bonds ticked up.

U.S. Secretary of State Marco Rubio spoke with his European

counterparts on Monday and discussed diplomatic efforts to bring

an end to the war in Ukraine.

Elsewhere, the South African rand slipped 0.3%, while

stocks in Johannesburg fell 0.7%. Data showed the

leading business cycle indicator rose 0.4% month on month in

June.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

(Reporting by Pranav Kashyap in Bengaluru

Editing by Ros Russell)