EM CURRENCIES STRONGER

EMERGING market (EM) currencies consolidated gains against the dollar on Friday, on track for their biggest weekly rise in close to two years but stocks snapped a three-day winning streak on concerns over US-Iran tensions.

The rand bid at R14.3094 to the dollar, slightly firmer than at the same time on Thursday, while the stocks inched lower, with the JSE Top40 index down 0.11 percent at 52 902.88 points, while the all share index fell 0.05 percent at 58 941.47 points.

A more dovish than expected US Federal Reserve outlook on Wednesday boosted appetite last week for developing world assets, starkly contrasting with 2018, when a slew of US rate hikes drained capital from emerging markets.

“It’s been a massive week for obvious reasons, in terms of the Fed being even more dovish than what people thought they could be,” said Stuart Ritson, head of Asian rates & FX at Aviva Investors.

MSCI’s emerging market currencies index was on track to rack up a 1.2 percent gain for the week, its biggest weekly rise since July 2017.

The MSCI’s developing world stocks index dipped 0.2 percent as rising US-Iran tensions took the edge off the Fed-fuelled rally, but was still set for a 3.6 percent weekly gain.

China’s yuan softened in onshore trade. Chinese stocks added 0.5 percent on the day, while South Korean equities declined 0.3 percent.

Turkey’s lira was 0.8 percent softer, while stocks fell 0.3 percent. The country’s disagreements with the United States over buying a Russian defence system show no signs of easing.

Russia’s rouble traded softer after firming 1.4 percent on Thursday to its strongest level since August 2018, in sympathy with Brent crude futures, which spiked on rising US-Iran tensions.

Moscow-traded stocks slipped 0.4 percent, ceding some of Thursday’s gains. I