*

Investors eye Trump's tax cut bill, hope for trade deals

*

South African rand surged over 5.5% so far this year

*

Israel's shekel set for best quarterly performance

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MSCI EM FX off 0.2%, stocks down 0.6%

By Purvi Agarwal

June 30 (Reuters) - Most emerging market currencies

strengthened against a falling dollar on Monday, while regional

equity indexes were mixed as investors awaited progress on trade

talks with the U.S. as the July tariff deadline loomed.

The dollar index traded around multi-year lows as

investors expected a dovish tilt from the Federal Reserve and

increasing chances that President Donald Trump's tax cut bill -

which is expected to add to the already high U.S. fiscal debt -

will be signed into law.

"The dollar struggled to gain traction with its long-term

downtrend intact, signalling more weakness ahead," said analysts

at LMAX Group.

Investors are also awaiting any trade deals out of the U.S.,

as a July deadline for tariffs looms, and as Canada and the U.S.

were set to resume trade talks which were stalled briefly.

Currencies in emerging Europe were subdued against an

advancing euro. The Hungarian forint was set for its

best six-month performance since June 2023, while the Polish

zloty was set to snap a three-quarter winning streak.

"Market conditions remain supportive for CEE FX, with a

weaker dollar leading the way... the global story (tariffs) may

introduce some noise, but the risk bias remains toward a softer

US dollar, which should continue to support CEE currencies,"

said analysts at ING.

Budapest stocks eyed a ninth quarter of gains, their

longest winning streak since 2004. Equities in Poland,

up 0.5%, were on track for their sixth month of gains.

In the Middle East, Israel's shekel was set for its

best quarterly performance on record, while Israeli stocks

looked set for their best quarterly percentage gains

since October 2003.

South Africa's rand has surged over 5.5% so far this

year, after logging declines for the last five years. Its stocks

were set for a sixth month of gains, up 0.6% on Monday.

Emerging market assets have had a good year so far, as

investors looked to move out of U.S. assets due to uncertainty

driven by Trump's tariffs and concerns over its mounting fiscal

debt.

MSCI's index tracking global EM currencies

was set for its sixth month of gains. It has risen 7% so far

this year, already more than it has climbed in any year since

2017.

The stocks gauge slipped 0.6% on the day.

Most markets rounded off last week with gains after a truce

between Iran and Israel helped calm some jitters over oil supply

disruption in the Middle East.

This week, all eyes will be on the jobs data out of the

U.S., with the all-important non-farm payrolls on Friday.

Taiwan's dollar fell 2.5% against the greenback, to

its lowest level since early June, with traders pointing to an

aggressive intervention by the central bank to sell the Taiwan

dollar at the end of the second quarter.

HIGHLIGHTS:

** China's weak factory activity maintains pressure for more

stimulus as tariff risks weigh

** Hungary central bank keeps countercyclical capital buffer

steady for banks

** Turkey's unemployment rate falls to 8.4% in May

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