PHOTO
Most emerging market currencies edged lower in holiday-thinned trading on Tuesday, under pressure from a strong U.S. dollar and rising Treasury yields, though Russia's rouble jumped for a fourth straight session.
The rouble strengthened 1.2%, last trading at 100 to the dollar, which analysts said was likely due to upcoming corporate tax payments.
"During the last sessions of the year, demand for foreign currency may increase due to the hedging of rouble positions over the New Year holidays, which will put pressure on the Russian currency," Alor brokerage analysts said.
The rouble has gained over 6% this month, according to LSEG data, but remains on track to lose 12% against the dollar this year, hit by U.S. sanctions and ongoing concerns over the conflict in Ukraine.
Adding to pressure on emerging market assets, the dollar was hovering around two-year highs, while the U.S. 10-year Treasury yield remained around levels last seen in May, propped up by expectations for fewer interest rate cuts from the Federal Reserve next year.
MSCI's gauge of emerging market stocks was up 0.3% at 0912 GMT, and the currency index was flat.
Both indexes are set to fall in 2024, with the outlook for 2025 also likely to be challenging with persistently high U.S. rates weighing on demand for riskier emerging market assets, pressuring their currencies and increasing inflation.
Elsewhere, trading was muted with markets in Poland, the Czech Republic and Hungary shut for the Christmas Eve holiday, among others.
South Africa's rand dipped 0.1% against the dollar, while the country's main stock index rose 0.4% ahead of an early close.
Turkey's lira slipped 0.2% against the dollar, while stocks rose 0.3%. Respondents to a Reuters poll expect the country's central bank to start a cycle of rate cuts at its policy meeting on Thursday.
Israel's main index dipped 0.3%, while the shekel lost 0.6% against the dollar.
Elsewhere, Chinese authorities have agreed to issue 3 trillion yuan ($411 billion) worth of special treasury bonds next year, two sources told Reuters, which would be the highest on record, as Beijing ramps up fiscal stimulus to revive a faltering economy.
Most emerging Asian stocks rose, with China stocks higher after Beijing said it would ramp up fiscal support for consumption next year.
(Reporting by Lisa Mattackal and Gleb Bryanski. Editing by Mark Potter)