EMERGING MARKETS-Currencies inch higher ahead of U.S. jobs data, S.Africa rand steadies

Emerging market currencies edged higher on Friday against a shaky dollar as investors await U.S. jobs data, while South Africa's rand steadied after the country's ruling party denied President Cyril Ramaphosa was considering resigning. The rand was up 1.8% against the greenback, at 0952 GMT, after falling nearly 4% in the last two days, hit by rumours Ramaphosa was going to quit over a report that found preliminary evidence he may have violated the constitution.

Emerging market currencies edged higher on Friday against a shaky dollar as investors await U.S. jobs data, while South Africa's rand steadied after the country's ruling party denied President Cyril Ramaphosa was considering resigning.

The rand was up 1.8% against the greenback, at 0952 GMT, after falling nearly 4% in the last two days, hit by rumours Ramaphosa was going to quit over a report that found preliminary evidence he may have violated the constitution. However, the chairman of South Africa's governing African National Congress (ANC), Gwede Mantashe, denied the speculation.

"I think the knee jerk reaction yesterday was to just sell the rand, but given that he's (Ramaphosa) not resigning immediately, investors are pinning their hopes to him staying in office," said Per Hammarlund, chief emerging markets strategist at SEB in Stockholm, Sweden. "Plus given that he has a more business-friendly profile than many others, markets are pinning their hopes of him staying in office."

Senior ANC officials were gathering on Friday to decide whether Ramaphosa should stay on as president. South Africa's dollar-denominated sovereign bonds rose up to 1 cent in the dollar. Other emerging market currencies were also higher, with the MSCI's FX index last up 0.4% as the dollar dipped ahead of data that will likely show the smallest U.S. jobs growth in nearly two years in November.

The EM FX index hovered near three-month highs and was headed for a weekly gain of 1.5%. The MSCI's index for emerging market stocks dropped 0.4%, snapping a three-day winning streak. But the index posted its best monthly performance in November since May 2009.

Markets are hopeful the U.S. Federal Reserve will slow its aggressive rate-hiking cycle and that China will gradually reopen its economy, resulting in higher demand for risky assets. Further easing of COVID-19 testing requirements and quarantine rules in some Chinese cities was met with a mix of relief and worry. The blue-chip CSI 300 index closed 0.6% lower, and the Shanghai Composite Index slipped 0.3%.

The Turkish Treasury said it had finalised the tap of its January 2028 dollar-denominated eurobond with a nominal amount of $2 billion, at a coupon rate of 9.875%. The lira was flat. Most major central and eastern European currencies edged higher against a flat euro. European Central Bank President Christine Lagarde warned on Friday that some European governments' fiscal policies could lead to excess demand. For GRAPHIC on emerging market FX performance in 2022, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2022, see https://tmsnrt.rs/2OusNdX

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