* Most Asian stocks down
* Czech crown steady after PPI data
* Hungarian forint hits near 2-month low
* Stocks down 0.3%, FX off 0.2%
Dec 18 (Reuters) – Assets across emerging markets had a
tepid start on Monday after cautious comments from U.S. Federal
Reserve policymakers weighed down on market expectations of a
dovish stance from the central bank.
MSCI’s gauge of emerging markets stocks dipped
0.3%, while a basket of currencies slipped 0.2%
against the dollar by 0930 GMT.
Both the stocks and currencies indexes had posted weekly
gains as the Fed kept interest rates steady on Wednesday and
signalled likely rate-cuts next year.
However, the rally was short-lived as the risk sentiment
faded after Federal Reserve Bank of New York President John
Williams said on Friday that it’s too soon to discuss cutting
the central bank’s interest rate target.
The dollar eased 0.2% against a basket of currencies,
having lost 1.3% last week.
“The dollar is recovering some ground after the pushback
from Fed officials against rate cut bets. However, the dovish
Dot Plot may work as an anchor for rates and keep the dollar
soft into the end of December,” Francesco Pesole, FX strategist
at ING, said in a note.
Most Asian stocks dipped, with Hong Kong shares
leading declines of nearly 1%.
Chinese banks are putting bad loans up for sale at a record
pace as regulators push for faster disposal of sour debts amid
rising consumer defaults during an ailing post-COVID economic
recovery.
China’s yuan slipped 0.2% to 7.1313 per dollar as
weak economic fundamentals dragged on sentiment, outweighing
benefits from exporters’ dollar sales towards the end of the
year.
In Europe, Czech’s crown was steady against the
euro after data showed producer prices for November rose 0.8% on
an annual basis missing forecasts of a 1.0% increase.
The Hungarian forint hit a near-two-month low and
was last seen at 0.4% down against the euro ahead of a monetary
policy decision on Tuesday, where the country’s central bank is
expected to cut interest rates by 75 basis points.
Turkey’s lira hit fresh lows of 29.0665 against
the dollar.
The South African rand was little changed, holding
onto gains from last week.
Israel’s economy grew slower than initially thought in the
third quarter, data showed on Sunday, in the wake of Israel’s
war with the Palestinian militant group Hamas, helping to raise
prospects of the start of rate cuts.
The Israeli shekel rose 0.4% against the dollar.
In South America, market focus will be on Chile, after the
country’s voters on Sunday rejected a new conservative
constitution to replace its current text that dates back to the
Augusto Pinochet dictatorship.
(Reporting by Siddarth S in Bengaluru; Editing by Tasim Zahid)
