Currencies edge higher; Hungary, South Africa in focus

Reuters

Currencies edge higher; Hungary, South Africa in focus

9:41 sáng giờ GMT, 30 Tháng 10 2024

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Updated at 0906 GMT

South Africa budget expected at 1200 GMT

China's new energy vehicles index hurt by EU tariffs

Poll: India c.bank to cut rates in Dec to 6.25%

Botswana heads to the polls with diamond downturn in focus

MSCI EM stocks index down 0.6%, FX up 0.2%

By Johann M Cherian

Oct 30 (Reuters) -Currencies across most emerging markets inched up on Wednesday, although Hungary's forint touched its lowest levels in nearly two years after weak economic data, and investors awaited South Africa's first budget since recent elections.

South Africa's rand ZAR= firmed 0.7% against the dollar, while yield on benchmark bonds ZAR2030= was flat as investors keenly awaited a budget speech by the finance minister at around 1200 GMT - the first by the new coalition government.

Economists polled by Reuters expect the country to trim its 2024/25 budget deficit estimate as it aims to lower interest payments on debt.

In central and eastern Europe, Hungary's forint EURHUF= weakened 0.2% to the euro, after data showed the country's economy unexpectedly entered into technical recession weighed down by weakness in farming, industry and construction in the previous three months.

"The large contraction in Hungary is worrying, but we think that the economy should return to positive growth over the coming quarters," said Nicholas Farr, emerging Europe economist at Capital Economics.

"Monetary easing and strong income growth should support consumer spending and, while we expect external demand from the euro-zone to be weak, exports are more likely to stagnate rather than fall sharply."

MSCI's index tracking bourses in developing markets .MSCIEF dropped 0.6% to touch a fresh one-month low, while a currencies index .MIEM00000CUS inched up 0.2% after three-straight sessions of declines.

The indexes have not witnessed large moves since early October as traders braced for the outcome of a tight U.S. election, which could determine the strength of the U.S. dollar and consequent directions of currencies in developing markets.

Republican candidate Donald Trump is seen to have an edge over rival Kamala Harris as per prediction market bets like PredictIt. His proposed domestic policies are viewed by analysts as inflationary, while his tariff proposals are expected to be more detrimental to some developing economies.

Meanwhile, heavy-weight China equities .CSI300, .SSEC closed lower. The new energy vehicles index .CSI399976 lost 1.3%, weighed down in part by the European Union's decision to increase tariffs on Chinese-built electric vehicles to as much as 45.3%.

In the caucuses, Georgia's lari EURGEL= depreciated 0.7% to the euro. Georgia's Prosecutor's Office said it was launching an investigation into possible falsification of Saturday's hotly contested parliamentary election.

With most central banks on a rate cutting cycle, a slim majority of economists expect India's central bank to lower borrowing costs in December. The south Asian nation's rupee INR=IN traded at 84 to the dollar.

Elsewhere, Botswana's pula BWP= edged up 0.3%, with all eyes on local elections.

For GRAPHIC on emerging market FX performance in 2024 http://tmsnrt.rs/2egbfVh

For GRAPHIC on MSCI emerging index performance in 2024 https://tmsnrt.rs/2OusNdX

Reporting by Johann M Cherian in Bengaluru; editing by David Evans

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