EMERGING MARKETS-China's yuan at 14-mth low, Turkish lira hits record low

  • Reuters
  • Stock Market News
EMERGING MARKETS-China's yuan at 14-mth low, Turkish lira hits record low
Credit: © Reuters.

By Claire Milhench

LONDON, Aug 3 (Reuters) - China's yuan hit a 14-month low on Friday and was set for its longest weekly losing streak since 1994, hampered by the ongoing trade dispute with the United States, while the Turkish lira hit a record low.

The renminbi CNY= was down 0.5 percent to its lowest since May 2017 and down almost 1 percent for the week as China and the United States continued to threaten tit-for-tat measures over trade, which investors fear will crimp global growth.

The yuan is set for its eighth weekly loss, its longest losing streak since the market exchange rate was unified in 1994. Chinese mainland shares .CSI300 tumbled 1.6 percent on the day and almost 6 percent for the week, their worst weekly fall since February.

The United States has proposed a higher 25 percent tariff on $200 billion of Chinese imports while China has threatened to retaliate if the U.S. acts on this threat. slide in the renminbi may be a response by policymakers to cushion the blow," said William Jackson, senior EM economist at Capital Economics, adding that China was more in focus now that the United States had softened its stance towards Europe and Mexico.

Disappointing Chinese services sector data added to the subdued sentiment, with a Caixin survey showing the sector expanded at the weakest in four months in July. MSCI's benchmark emerging stocks index gained a meagre 0.1 percent and was set to end the week down over 2 percent.

Hungary .BUX was among the better performers, up 0.9 percent, while Indian shares .NSEI rose 0.8 percent after services activity rose to a 21-month high in July. South Korea stocks .KS11 also posted 0.8 percent gains.

But currencies struggled in the face of a stronger dollar.

Turkey's lira TRY= fell as much as 0.6 percent, pushing through 5.1 per dollar, before retracing some of these losses following inflation data that was not quite as bad as feared.

However, year-on-year inflation still hit 15.85 percent in July, its highest in more than 14 years as food prices surged, reflecting the impact of a currency crisis the central bank has been unable to contain. big picture is that inflation has sky-rocketed and while you can pin some of that on weakness in the currency there is also a more fundamental problem as inflation expectations have become unanachored as the central bank has kept policy too loose for too long," said Jackson.

Turkey's finance minister, Berat Albayrak, reiterated comments that inflation would come down. lira is still down around 4.7 percent for the week in the wake of U.S. sanctions on two Turkish ministers, in a dispute over the trial of a U.S. pastor in Turkey who is accused of backing terrorism.

U.S. and Turkish foreign ministers have agreed to keep trying to resolve the issues between the two countries. rouble RUB= fell 0.3 percent, trading near two-week lows hit on Thursday and down over 1 percent for the week.

The leg lower followed the introduction of a Russian sanctions "bill from hell" by U.S. senators in an attempt to punish Moscow over interference in U.S. elections, plus its activities in Syria and Ukraine. bill includes restrictions on new Russian sovereign debt transactions, but Russian dollar bonds were slightly firmer after selling off on Thursday. South African rand ZAR=D3 also looked set to end the week down around 2 percent after investors were rattled by plans for land expropriation without compensation. South African private sector activity contracted for the first time in six months in July. GRAPHIC on emerging market FX performance 2018, see http://tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2018, see http://tmsnrt.rs/2dZbdP5

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 ) Emerging Markets Prices from Reuters

Equities

Latest

Net Chg % Chg % Chg

on year

Morgan Stanley (NYSE: MS )

Emrg Mkt Indx .MSCIEF 1068.47

+1.05 +0.10 -7.77

Czech Rep

.PX

1090.41

+1.32 +0.12 +1.14

Poland

.WIG20

2288.01

+4.07 +0.18 -7.04

Hungary

.BUX

36352.09 +316.63 +0.88 -7.68

Romania

.BETI

8002.61

+8.50 +0.11 +3.21

Greece

.ATG

757.65

+1.72 +0.23 -5.57

Russia

.IRTS

1138.71

-2.25 -0.20 -1.36

South Africa

.JTOPI 50462.02 +121.54 +0.24 -3.94

Turkey

.XU100 95156.13 +612.86 +0.65 -17.49

China

.SSEC

2741.08 -26.94 -0.97 -17.12

India

.BSESN 37494.92 +329.76 +0.89 +10.10

Currencies

Latest

Prev

Local

Local

close currency currency

% change % change

in 2018

Czech Rep

EURCZK=

25.70

25.66 -0.15

-0.65

Poland

EURPLN=

4.27

4.27 +0.00

-2.27

Hungary

EURHUF= 321.17

321.12 -0.02

-3.31

Romania

EURRON=

4.62

4.62 +0.00

+1.27

Serbia

EURRSD= 117.89

117.93 +0.03

+0.43

Russia

RUB=

63.41

63.33 -0.13

-9.07

Kazakhstan

KZT=

349.71

350.16 +0.13

-4.84

Ukraine

UAH=

27.09

27.01 -0.28

+3.91

South Africa ZAR=

13.45

13.44 -0.03

-8.09

Kenya

KES=

100.25

100.20 -0.05

+2.84

Israel

ILS=

3.70

3.69 -0.22

-5.91

Turkey

TRY=

5.08

5.06 -0.32 -25.42

China

CNY=

6.87

6.84 -0.50

-5.33

India

INR=

68.75

68.62 -0.19

-7.16

Brazil

BRL=

3.75

3.75 -0.01 -11.67

Mexico

MXN=

18.66

18.65 -0.09

+5.28

Debt

Index Strip Spd Chg %Rtn Index

Sov'gn Debt 11EML EMBIG 355

-4

.35 7 80.20 1

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