EMERGING MARKETS-Turkey's lira steady after inflation data, rouble follows oil lower

  • Reuters
  • Stock Market News
EMERGING MARKETS-Turkey's lira steady after inflation data, rouble follows oil lower
Credit: © Reuters.

* Turkey's lira firm after inflation data

* Russia's rouble tracks weaker oil prices

* FX trading volume thin with UK markets shut

By Shashank Nayar

May 3 (Reuters) - Most emerging market currencies weakened on Monday as the dollar firmed at the start of a week packed with key U.S. economic data, while a slightly lower-than-forecast inflation reading helped support the Turkish lira.

The lira TRY= inched higher to trade at 8.29 per dollar after falling to 8.33 earlier in the session.

Trading volumes were thin across the board, however, with London markets closed for a public holiday.

Data showed Turkish annual inflation climbed to 17.14% in April, its highest level in nearly two years, driven by a sagging lira and pricy commodity imports. Still, the battered currency found relief as the numbers came in lower than a Reuters poll forecast of 17.3%. central bank estimated last week that inflation would peak in April and decline to 12.2% by year-end. Policymakers will meet on Thursday, and market participants expect them to keep the policy rate unchanged at 19% and start cutting in third quarter. steady CBRT meeting outcome may drag USD-TRY back towards 8.20, but this would create a buying-on-dips opportunity, in our view, as we expect a 400bp easing this year in Turkey, starting in July," Unicredit (MI: CRDI ) analysts wrote in a note.

Russia's rouble RUB= fell 0.4% to 75.44 versus the dollar, tracking weaker oil prices LCOc1 as a deadly second wave of coronavirus infections in the world's third largest consumer of oil, India, raised demand concerns. O/R

Trading activity in Russia is likely to be thinner than usual for the rest of the week after President Vladimir Putin declared May 4-7 non-working. However, the country's two largest stock exchanges will remain open and the central bank will carry out its regular market. MSCI's wider index of EM currencies .MIEM00000CUS slipped to a one-week low earlier in the session as the dollar clung to a recent bounce ahead of a raft of U.S. economic data this week, including the ISM manufacturing survey and April payroll numbers. FRX/

An index of EM equities .MSCIEF slipped 0.6% as Asian heavyweights including China and Thailand were closed and Russian stocks .IMOEX tumbled.

For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX

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

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB

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