EMERGING MARKETS-EM currencies, stocks lose ground as Fed succession talk lifts dollar

Most emerging market currencies and stocks fell ‌on Friday, after U.S. President Donald Trump firmed his pick for the next Federal Reserve chair, while a decline commodity prices added further pressure on some equities.

Most emerging market currencies and stocks fell ‌on Friday, after U.S. President Donald Trump firmed his pick for the next Federal Reserve chair, while a decline commodity prices added further pressure on some equities. Trump said he would name Fed Chair Jerome Powell's successor on Friday. A person familiar ⁠with the matter said Kevin Warsh had visited the White House on Thursday, while Bloomberg News reported that the former Fed governor would get the nod.

Markets anticipate Warsh to bring a slightly hawkish tilt to the central bank, and the news supported the dollar index on Friday, strengthening against most emerging market currencies. "Trump's first selection criterion is whether the candidates are ​willing to pursue lower interest rates. So, if he does nominate Warsh later today, he (Warsh) is unlikely to be as hawkish as he once was," said Bas ‍van Geffen, senior market strategist at Rabobank.

"The market may respond optimistically to the prospect of Warsh's nomination, but broader U.S. policy uncertainty is still not doing the dollar any favours." MSCI's index tracking EM currencies slipped 0.3%, but was on track to post weekly gains, its biggest jump since August.

Most Asian currencies lost ground. South Africa's rand weakened 1.6% against the greenback, but was set for its tenth week of gains, a ⁠streak last ‌seen in 1990. Local stocks retreated sharply, down ⁠3.3%, set for their steepest intraday decline since April, as gold prices dropped more than 6%, hurting miners of the precious metal.

Turkey's lira was little changed against the dollar, and stocks slipped 0.5% after ‍two sessions of gains. Most currencies in emerging Europe were subdued against the euro, but the Hungarian forint depreciated 0.8%, set for its steepest weekly fall in more than a month.

Regional bourses were higher, ​with ones on Romania and Hungary up 0.4% and 0.5%, respectively. Polish stocks were off 0.4%. MSCI's measure of EM stocks retreated 1.4%, but the index was ⁠set for its biggest monthly gain since November 2022. Meanwhile, Trump said Kremlin leader Vladimir Putin had agreed to refrain from firing on Kyiv and other Ukrainian cities for a week because of cold winter weather, ahead of ⁠upcoming talks between the three countries over the weekend.

Ukraine bonds broadly rose close to 1 cent on the dollar each, with ones maturing in 2035 up 0.9 cent. Elsewhere in EMs, Indonesia's chief economic minister promised increased financial market transparency and improved corporate governance, after the stock exchange chief resigned to take responsibility for a $80 billion share ⁠rout. The index closed 1.2% higher after a more than 8% drop in the last two sessions. Ethiopia will go back to holders of its $1 billion Eurobond for further negotiations ⁠after its official creditors said a proposed debt ‌restructuring deal struck early this month did not meet comparability requirements.

HIGHLIGHTS: ** China logs first fiscal revenue drop since 2020 on property slump, weak consumption ** Taiwan economy soars in Q4 on AI demand, 2025 expands at fastest rate in 15 years

For TOP NEWS ⁠across emerging markets For CENTRAL EUROPE market report, see

For TURKISH market report, see For RUSSIAN market report, see

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