Global Market Jitter: Emerging Markets React to U.S. Tariff Decisions

Emerging market stocks and currencies fell as markets reacted to impending U.S. tariffs and economic data. U.S. trade deals, tariff changes, and interest rate decisions influenced the market dynamics. South Korea and Brazil saw tariff adjustments, while South Africa anticipated a local rate cut amid global uncertainty.

Emerging market currencies and stocks experienced a downturn on Thursday, as global investors processed statements regarding U.S. tariffs, poised for the impending August 1 deadline. Meanwhile, markets awaited significant U.S. economic data and pivotal central bank decisions.

Changes in U.S. trade policy included the reduction of tariffs on South Korea from 25% to 15% and certain Brazilian goods receiving exemptions. These policy shifts coincided with U.S. Federal Reserve Chair Jerome Powell maintaining interest rates, dampening expectations for a September cut, amid a flat dollar index.

Focus shifted towards macroeconomic indicators and potential tariff impacts on inflation. Market participants remained vigilant for any new trade announcements that could pave a less aggressive U.S. tariff strategy. Declines were observed across emerging markets, influenced further by China's manufacturing downturn for the fourth consecutive month in July.

(With inputs from agencies.)