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EMERGING MARKETS-Stocks track global shares higher, dollar gains weigh on FX
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EMERGING MARKETS-Stocks track global shares higher, dollar gains weigh on FX
Aug 7, 2024 3:28 AM

(Updated at 0855 GMT)

*

Romanian central bank seen cutting rates by 25 bps

*

Outlook for CEE currencies mixed: Reuters Poll

*

Bangladesh c.bank officials resign due to protests -

sources

By Lisa Pauline Mattackal

Aug 7 (Reuters) - Emerging market stocks rose on

Wednesday, as global shares bounced back from a brutal sell-off

at the start of the week, while a strengthening dollar weighed

on local currencies.

Elsewhere, Romania's leu was little changed

against the euro ahead of the central bank's August

monetary policy decision. Analysts polled by Reuters expect

Romania's central bank to cut rates by 25 basis points, the

second rate cut in the current easing cycle.

The gains came as European and Asian share markets rose, led

by another bounce in the Nikkei, as the Bank of Japan

unexpectedly turned cautious on rate hikes amidst market

volatility.

The unravelling of the yen carry trade, coupled with a

softer-than-expected U.S. jobs report last week, and fears of a

U.S. recession sparked a global sell-off earlier this week with

investors dumping riskier assets and moving to safe-havens.

"It's unclear how long this current bout of heightened

volatility will last, yet we've seen global equity markets

correct this violently before and never in the past have they

not eventually rebounded to new highs," said John Christofilos,

chief trading officer, at AGF Investments.

Bourses in Prague, Budapest and Turkey

all gained over 1%. Polish stocks underperformed with a

0.2% fall.

However, markets are still assessing the likelihood of a

slowdown in the United States and what it means for the Federal

Reserve outlook, while growing worries about China's economic

strength continue to overshadow emerging market assets.

Data on Wednesday showing Chinese export growth slowed in

July added to concerns about the country's manufacturing sector.

The dollar rose against the yen on Wednesday, which dropped

after an influential Bank of Japan official played down the

chances of a near-term rate hike. The greenback's rise weighed

on emerging market currencies, with MSCI's EM currency index

standing flat on the day.

The Indian rupee fell to an all-time low

against the dollar ahead of India's central bank policy decision

on Thursday.

The South African rand jumped to 18.352 against the

dollar, rising for a second day, while stocks firmed

0.6%.

Currencies across central Europe were broadly steady to

stand lower against the euro. Hungary's forint slipped

0.3%, the Polish zloty fell 0.1%, while the Czech

crown was flat.

Central European currencies are facing diverse outlooks for

the next 12 months, according to a Reuters poll, with the zloty

and crown expected to rise over the next year while the forint

and leu are seen falling.

The Kenyan shilling was little changed against the

dollar, a day after the central bank cut rates by 25 basis

points.

Kenya's central bank governor said the country had no plans

for a $1 billion bond buyback before the year's end, while

forecasting economic growth of 5.5% in 2025, similar to 2024's

5.4%.

Elsewhere, sources told Reuters that protests had forced the

resignations of four deputy governors of Bangladesh's central

bank.

HIGHLIGHTS:

** GRAPHIC-Foreign inflows into Asian equities slow sharply

in July, hit by tech slump

** India cenbank asks top banks to refrain from large

trading bets against rupee, sources say

** IMF reports progress in El Salvador talks, flags Bitcoin

risks

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see

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