*

US Fed holds rates, sees no hurry to cut

*

ECB, South Africa central bank decision awaited

*

Turkish economic confidence rises in January

*

MSCI EM FX off 0.1%, stocks flat

By Purvi Agarwal

Jan 30 (Reuters) - Most emerging market currencies were

steady against the dollar on Thursday after the U.S. Federal

Reserve said it saw no hurry to cut interest rates again,

amplifying prospects for persistently high rates in the world's

biggest economy.

MSCI's index tracking global EM currencies

was off 0.1%. Trading was thinned as most Asian markets were

closed for a Lunar New Year holiday.

The Fed on Wednesday held rates steady and Chair Jerome

Powell said there would be no rush to cut them again until

inflation and jobs data made it appropriate.

Markets have increasingly dialled back expectations of rate

cuts from the Fed in 2025, given the resilience of the U.S.

economy and the potentially inflationary impact of President

Donald Trump's policy plans.

The spectre of U.S. rates staying higher for longer, coupled

with threats of tariffs, has pressured demand for most EM assets

that appear risky compared to safe-haven U.S. assets, clouding

their prospects for 2025.

Most emerging Europe currencies were steady against the euro

ahead of the European Central Bank's monetary policy decision,

which is widely expected to be a 25 basis point cut.

"A mildly hawkish Fed should put some pressure on EM

markets," ING analysts said in a note, although they added that

"currencies appear to remain confident."

Over-the-counter data showed the Russian rouble

strengthened 1.3% against the dollar.

Elsewhere, South Africa's rand was slightly higher

against the dollar ahead of the South African Reserve Bank's

meeting, where it is expected to lower borrowing costs by 25

basis points.

"The SARB has been cutting rates slower than what we've seen

in the US. It still has room to move even if the Fed pauses...,"

said Shaun Murison, senior market analyst at IG.com.

"However, there's a lot of potential for inflation on a

global level with the new Trump administration. It is likely

that we could deduct a wait and see approach (at the meeting)

and maybe not see another rate cut this quarter."

Turkey's economic confidence index rose 0.8% month-on-month

in January, data showed. The lira was 0.1% higher

against the dollar.

Among equities, MSCI's emerging stocks measure was

little changed. Poland's main index was up 1.1%.

Philippine stocks fell to their lowest levels since

mid-November after the economy recorded slower than expected

growth in the fourth quarter.

HIGHLIGHTS:

** Hong Kong central bank keeps base rate unchanged as Fed

holds steady

** Indonesia central bank assures balance of FX supply and

demand amid rupiah fall

** Saudi Arabia says GDP grew 1.3% in 2024, lifted by non

oil sector

For TOP NEWS across emerging markets

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For TURKISH market report, see

For RUSSIAN market report, see