Dollar Weakness Supports EM Currencies, Lira Slides Again


U.S. dollar weakness lifted most emerging market currencies on Tuesday as investors looked to U.S. politics and progress on COVID19 vaccines, but the Turkish lira came under renewed pressure.

The South African rand and the Russian rouble extended this weeks winning run, while the lira fell almost 1.5 to trade at 7.9899 per dollar, its weakest since Nov. 11.

After a strong rally in the wake of a bumper interest rate hike last week, the Turkish currency languished again as new coronavirus restrictions began and investors look for signs of sustained central bank support.

The pair returned back to the 7.90 area, suggesting that investors share our continued skepticism concerning a sustainable TRY appreciation over the medium term, given the economic and political impasse at home, analysts at UniCredit said in a note.

The Turkish banking index, however, jumped over 2 after a regulator said that it had decided to halt the calculation of banks asset ratios from the end of the year as part of normalisation steps.

The MSCIs index of EM equities clung to a fresh 32month high hit in the previous session. Bourses in Moscow , Istanbul and Johannesburg rose between 0.3 and 0.9, with Moscow aided by a jump in oil prices.

Most Asian stock markets were subdued, although Indias Nifty 50 hit a record high, topping 13,000 for the first time.

Markets globally took heart from signs of progress in the development of coronavirus vaccines, while a formal transition approval for U.S….

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