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EM stocks down 0.4%, FX down 0.1%

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Czech National Bank keeps rates on hold

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Pepco Group jumps after reporting higher revenue

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Turkey's Erdogan to meet Trump later in the day

By Nikhil Sharma

Sept 25 (Reuters) - Emerging market stocks fell on

Thursday, while currencies also wavered against a steady dollar

as investors assessed prospects of a measured U.S. monetary

policy easing outlook.

The MSCI index tracking emerging market equities

lost 0.4%, set to snap three days of gains. A parallel gauge for

currencies slipped 0.1%, set to extend its

losing streak to six sessions.

The U.S. dollar was steady after having strengthened since

last week's Federal Reserve rate cut, as comments from officials

this week, including Fed Chair Jerome Powell, signaled a

cautious tone on future rate cuts.

"The movements that we've been seeing this week (in EM

markets), it's very much a dollar-driven story, with Powell's

comments about sort of a more cautious stance towards rate

cuts," said Fiona Cincotta, senior market analyst at City Index.

"What happens next will depend largely on the data that

we've got coming this afternoon."

The Personal Consumption Expenditures report, the Fed's

preferred gauge of inflation, on Friday and the final estimate

for second-quarter U.S. GDP on Thursday could help investors

gauge the impact of tariffs and future rate-cut expectations.

In Central Eastern Europe, the Czech and Hungarian central

banks held their rates steady, causing the Czech crown

and Hungarian forint to trade with caution on

Thursday.

Prague equities traded flat, while Hungary's main

equity index edged 0.2% higher.

Polish stocks dropped 0.8% and the zloty

was subdued.

Warsaw-listed discount retailer Pepco Group jumped

more than 12% after reporting higher year-to-date revenue,

helped by store expansion and like-for-like growth at its core

Pepco brand.

The European Bank for Reconstruction and Development lifted

its 2025 growth forecast slightly to 3.1%, but warned tariffs

and war would weigh in 2026. It noted emerging European

countries' growth lagged its peers.

In Latin America, the Argentine markets' comeback this week

grabbed headlines. The markets roared further on Wednesday after

U.S. revealed ongoing negotiations for a $20 billion swap line

with the country's central bank.

The local peso jumped 2.1% in the previous session,

recovering its losses incurred after Milei's legislative setback

in early September. Stocks rallied 1.5%.

"The U.S. intervention has served as a circuit breaker,

affording the Milei administration greater latitude ahead of the

October elections," J.P.Morgan analysts said in a note.

"The peso's appreciation has enabled the central bank to

ease monetary and credit conditions, forestalling further

economic strain."

In Asian Emerging Markets, Thailand's baht fell

about 0.4% after ratings agency Fitch downgraded the economic

outlook to "negative" from "stable", saying political

uncertainties were posing a risk to public finance.

For TOP NEWS across emerging markets

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