Emerging Market Currencies Struggle Amid U.S. Tariff Uncertainty

Emerging market currencies experienced flat-to-lower trading due to uncertainty over U.S. tariffs. President Trump's mixed signals on tariffs contributed to market caution, impacting global stocks and emerging market assets. Signs of progress in Ukraine peace talks provided some relief, though Turkish assets faced pressure amid political turmoil.

Emerging market currencies traded in a flat-to-lower range on Wednesday, as investors awaited further developments on U.S. tariffs. Meanwhile, global stocks hovered close to the flat line.

This week, markets found some relief after U.S. President Donald Trump suggested that not all proposed tariffs would go into effect on April 2. However, uncertainty persists as Trump remains firm on automobile tariffs. Adding to the tension, an executive order on Monday mandated a 25% tariff on U.S. trades with countries purchasing oil or gas from Venezuela.

Economists at SEB highlighted how American politics and tariff uncertainties drive abrupt shifts in the global economy. Despite these challenges, progress on a ceasefire deal briefly propped up Ukraine's international bonds, as the U.S. reached agreements with Kyiv and Moscow to halt attacks.

(With inputs from agencies.)