Currencies set for worst week since February on dollar rebound

Currencies set for worst week since February on dollar rebound

Emerging markets currencies were on track for their worst week since February on Friday, as the U.S. dollar rebounded after five straight weeks of losses on bets of another Federal Reserve interest rate hike in May.

The MSCI's index for emerging market currencies slipped 0.2% and was on track to end the week 0.6% lower as the dollar strengthened.

Hungary's forint extended losses for a third straight session, down 0.5% against the euro, as comments from Hungarian central bank Deputy Governor this week signalling what could be the region's first rate cut continued to weigh.

The forint was on track for its worst week since mid-March, while the Polish zloty outperformed central and eastern European peers.

Among bonds, Egypt's dollar-denominated government notes extended losses, with the issue maturing in 2024 falling more than 1.1 cents and hovering near a record low, Tradeweb data showed.

"It is obvious that a confidence issue has surfaced and credible action is needed to regain the trust of markets," JP Morgan economists said in a note.

Emerging market stocks slid 0.9% and were also on track for weekly losses.

China's blue-chip CSI300 Index and the Shanghai Composite Index both closed 2% lower, while Hong Kong's benchmark Hang Seng Index ended 1.7% lower.

Equities