EMERGING MARKETS-Most EM currencies tread water ahead of US inflation test

Most currencies in emerging Europe traded in a tight range on Wednesday, as caution prevailed ahead of a crucial U.S. inflation print which could be key in gauging whether the Federal Reserve could cut interest rates anytime soon. Poland's zloty held steady at 4.26 per euro after data showed Polish inflation stood at 2.4% in April on a year-on-year basis, unchanged from last month's reading.

Most currencies in emerging Europe traded in a tight range on Wednesday, as caution prevailed ahead of a crucial U.S. inflation print which could be key in gauging whether the Federal Reserve could cut interest rates anytime soon.

Poland's zloty held steady at 4.26 per euro after data showed Polish inflation stood at 2.4% in April on a year-on-year basis, unchanged from last month's reading. Separately, a preliminary estimate showed Poland's GDP rose to 1.9% year-on-year in the first quarter, against estimates of 1.8% growth as per economists polled by Reuters.

Romania's leu was last trading at 4.97 per euro after a flash estimate showed the country's economy rose 0.1% on the year in the first quarter, below market expectations. Hungary's forint dipped 0.1%, while the Czech crown edged 0.1% higher, hovering near a 15-week high.

Equity bourses across Central Eastern Europe were mixed, with stocks in Hungary and Romania up 0.4% each, respectively, while Polish stocks lost 0.6%. South Africa's rand edged 0.1% higher against the dollar ahead of a retail sales reading later in the day, while shares in Johannesburg rose 0.7%.

As of 0828 GMT, MSCI's gauge for emerging market stocks gained 0.5%, touching its highest level in over two years, while an index for currencies added 0.4%. Focus would remain on U.S. consumer data for the month of April due later in the day, which could offer clues into when the Fed could commence its policy easing cycle.

"While we would expect (inflation) to remain too elevated for the Federal Reserve to feel confident that the time has come to start cutting interest rates, it would mark a step in the right direction," Julien Lafargue, chief market strategist at Barclays Private Bank said. "We continue to expect gradual, albeit bumpy, disinflation in the coming months, enough that could allow the Fed to cut interest rates before the end of the year."

Meanwhile in Asia, Chinese equities ended around 1% lower, pressured by U.S. President Joe Biden's decision to levy fresh tariffs on Chinese goods. HIGHLIGHTS:

** MicroStrategy, Indian companies among additions to MSCI indexes ** Slovak economy gains momentum, Romania stays on growth path

** Hungary posts record current account surplus in March For TOP NEWS across emerging markets

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