A gauge of emerging market currencies rose 0.3% on Friday, pushing MSCI’s emerging market currency index to fresh record highs for the month and extending an eight-week winning streak.
The South Korean won led regional gains, climbing 0.9% to an 11-month high and tracking a weekly advance of more than 2%. The Taiwanese dollar added 0.7%, while the Chinese yuan hovered near a 3.5-year peak. The Czech koruna strengthened 0.4% against the euro, and the Turkish lira surged 2.1%.
Emerging market equities showed mixed performance. MSCI’s emerging market stock index rose 1.3%, on course for a second straight weekly gain, even as South Korea’s KOSPI and Taiwanese shares edged higher but remained set for weekly losses of nearly 1%. In China, the CSI 300 blue-chip index advanced 0.6%, while the Shanghai Composite was little changed.
In Central Europe, the Polish zloty gained 0.2% and Czech stocks rose 0.5%, with Poland’s market up 0.8%. Turkish equities climbed 0.8%, supported by a rise in manufacturing business confidence to 102.8 points in August, indicating optimism.
Policy developments and geopolitical tensions added context to the currency moves. U.S. Treasury Secretary Scott Bessent said the government could expand Treasury buybacks and raised the prospect of fiscal consolidation. China’s Vice Finance Minister Liao Min stated that additional fiscal measures would be rolled out as growth in the world’s second-largest economy slows.
In Europe, the Czech Republic’s finance ministry lowered its growth outlook on Thursday, while Poland proposed raising the corporate tax rate for large utilities and fuel companies to 30% in 2027. Regional markets in Hungary were closed for a public holiday.
The U.S. Treasury intervened in markets on Wednesday, briefly easing selling pressure before Treasury yields resumed their climb, underscoring ongoing volatility in global rates.
