Turkeys lira eased on Thursday ahead of its central banks interest rate decision in the face of rising inflation, while investors await a key U.S. jobs report for clues on the pace of a global economic recovery and further monetary stimulus.
The lira shed 0.2. The central bank is expected to hold rates steady at 19 and not hint about a rate cut until the third quarter as economists see higher inflationary pressures, ahead a Reuters poll showed.
If the May inflation data indeed comes out lower than the April peak of 17 expected by the Turkish central bank… we think the likelihood of monetary policy easing at the June meeting will be stronger, said Berna Bayazitoglu, an analyst at Credit Suisse.
The lira has dropped nearly 19 since March this year when President Tayyip Erdogan replaced hawkish governor Naci Agbal with Sahap Kavcioglu, who shares Erdogans unorthodox view that high interest rates cause inflation.
MSCIs index of emerging market currencies was subdued and stocks rose 0.3, snapping a fiveday losing streak as the Chinese yuan remained largely stable despite souring political relations and expectations of slowing export growth.
However, a recent rise in commodities such as oil and copper have helped support the currencies of most emerging markets like South Africa, Chile and Peru.
Russias rouble gained 0.2 buoyed by rising oil prices and data showing its service sector grew in April.
Emerging market currencies will find support from higher commodity…