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LONDON, July 3 (Reuters) – Turkey's lira fell more than 1 percent on Tuesday after expected inflation, while trade tensions between the United States and China continued to grow stocks.
The lira slipped as much as 1.4 percent against the dollar to one-week after inflation. Spiked 2.61 percent month-on-month in June, for an annual 15.39 percent rise year-on-year. This is the highest since 2004 when a new method of calculating inflation was introduced.
Producer also rose 3.03 percent month-on-month for an annual rise of 23.71 percent. The leap in inflation comes from the basis of 500 points.
Henrik Gullberg, an emerging markets strategist at Nomura, said the focus was on the central bank on July 24.
"The central bank needs to break this currency." is more likely to be fed into inflation, but then They need to hike rates aggressively, "he warned.
Investors also eyed a looming July 6 deadline, when the United States intends to impose tariffs on $ 34 billion worth of goods from China, likely triggering Chinese retaliation.
The President of the United States, President of the United States, President of the World Trade Organization, said:
The latest data showed China's exports to the US in June rose 3.8 percent in yuan terms versus a year ago, but this was 23.8 percentage points lower than the growth rate a year earlier.
MSCI's benchmark emerging markets index fell 0.3 percent with Asian markets leading the losses, while the yuan fell 0.2 percent in early trading. This took the psychologically important 6.7 per dollar mark for the first time since Aug. 9, 2017.
The Chinese currency has been in a downward spiral in the recent past.
"Given the scale of the move we've seen since June," said Bank of New York Mellon strategist Neil Mellor.
"It speaks to a remedial measure that obviously gets markets moving and it's more likely that it has to be matched by South East Asia because of the competitive implications."
The People's Bank of China sought to calm market jitters, blaming the yuan's weaknesses on US dollar strength and external uncertainties, as the state-owned banks were seen trying to prop up the currency. This helped a floor under the yuan, and it recovered to trade flat.
In the latest development in the ongoing row, the United States moved on Monday to block China Mobile by offering services to the U.S. telecom market, citing national security grounds. The company's Hong Kong-listed shares fell over 2 percent to their lowest in over four years.
The Hong Kong Stock Exchange was also down 1.4 percent to its lowest level since October, but Chinese mainland shares struggled into positive territory, reversing an early sell off that saw blue chips hit May 2017 lows.
Other big fallers Indonesia, down 1.8 percent and Taiwan, down 0.6 percent, but emerging Europe opened firmer, with Hungary stocks up 1 percent and Poland 0.9 percent.
Elsewhere, the Mexican peso bounced 1.1 percent after weakening in the previous session in the wake of a landslide win by Andres Manuel Lopez Obrador.
He had a call with trump to discuss immigration, trade and security issues on Monday, with Trump saying the relationship would be "good".
One of the Mexican leader's advisers also said that NAFTA was possible before December.
Hungary's 0.8 percent against the euro, outperforming its regional peers, ahead of a central bank non-rate setting meeting.
The forint's weakness in recent years and a rise in market rates of interest has been achieved in the early years of the crisis.
For GRAPHIC on emerging market FX performance 2018, see tmsnrt.rs/2e7eoml For GRAPHIC on MSCI emerging index performance 2018, see tmsnrt.rs/2dZbdP5
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report ,
For TURKISH market report, see
For RUSSIAN market report, see) Emerging Markets Prices from Reuters Equities Latest Net Chg% Chg% Chg
on year
Morgan Stanley Emrg Indx Mkt 1057.04 -2.28 Czech Rep. 1075.12 +4.62 +0.43 -0.28
Poland 2137.33 +18.02 +0.85 -13.16
Hungary 36192.45 +324.70 +0.91 -8.09
Romania 8051.68 +31.51 +0.39 +3.84 + 19659002] Greece 750.42 +2.21 +0.30 -6.47
Russia 1149.19 -2.47 -0.21 -0.45
South Africa 50690.83 -289.04 -0.57 -3.51
Turkey 97034.03 +260.54 + 0.27 -15.87
China 2786.35 +10.79 +0.39 -15.75
India 35383.94 +119.53 +0.34 +3.90
Currencies Latest Local Local Local
close currency currency
% change% change
in 2018
Czech Rep 26.13 26.08 -0.18 -2.29
Poland 4.40 4.40 +0.06 -5.03
Hungary 327.40 329.90 +0.76 -5.15
Romania 4.65 4.66 +0.15 +0.50
Serbia 117.89 117.88 -0.01 +0.43
Russia 63.20 63.40 +0.31 -8.77
Kazakhstan 342.86 341.56 -0.38 -2.93
Ukraine 26.29 26.22 -0.27 +7.06
South Africa 13.70 13.82 +0.85 -9.82
Kenya 100.75 100.80 + 0.05 +2.33
Israel 3.66 3.66 -0.01 -5.01
Turkey 4.66 4.61 -0.97 -18.64
China 6.65 6.66 +0.18 -2.18
India 68.63 68.71 +0.12 -6.99
Brazil 3.91 3.91 -0.06 -15.38
Mexico 19.74 19.95 +1.05 -0.47
Index Debt Strip Spd Chg% Rtn Index
Sov'gn Debt EMBIG 388 0 .04 7 65.10 1
Reporting by Claire Milhench; additional reporting by Marc
Jones, graphic by Karin Strohecker
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