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Emerging assets climb as dollar Trump trade takes a breather

Kuala Lumpur - Emerging-market currencies headed for their biggest advance in six weeks as the so-called Trump trade - which has buoyed the dollar since the US presidential election - takes a breather.

The South African rand and Turkish lira were the best performers among developing-nation currencies, while South Korea’s won led gains in Asia.

The dollar declined as a retreat in Treasury yields sapped demand for the greenback before US economic data this week, including the November payrolls report, and ahead of a constitutional referendum in Italy on December 4.

A gauge of emerging-market shares trimmed its loss since Donald Trump’s surprise victory in the November 8 vote to less than 5%.

“I think the rally in emerging market assets will be just a short term one: some investors might be coming in just to cover their short positions or selling their dollar positions after the recent rally,” said Jeffrosenberg Tan, a director at PT Sinarmas Sekuritas in Jakarta. “It’s too early to draw the conclusion that this will be a turning point for the market.”

The MSCI Emerging Markets Currency Index rose 0.3% at 09:14, after snapping a four-week slide in the five days ended on Friday.

It’s heading for the biggest gain since October 19. A gauge of developing-nation stocks climbed for a second day, adding 0.8%, led by information technology and consumer discretionary shares.

The rand jumps 1.3% to 13.9361 per dollar and touched the highest since November 10. At least three members of South Africa’s cabinet have called on President Jacob Zuma to step down or for the ruling party’s National Executive Committee to vote to remove him, News24 reported.

Lira strengthens 0.7%, snapping a four-day slide to a record-low 3.4766 per dollar Benchmark indexes climb 0.9% in Turkey, 0.7% in Taiwan, 0.5% in China, while the equity gauge in the Philippines slides 0.9%.

The Hang Seng China Enterprises Index of mainland stocks listed in Hong Kong gained 1.4%, set for its highest close since October 7 The yield on South Korea’s three-year government bond declined five basis points to 1.77%, while that for the 10-year note slipped three basis points to 2.16%.

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, dropped 0.5%, retreating for a second day.

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Rand - Dollar
19.04
-0.7%
Rand - Pound
23.98
-0.4%
Rand - Euro
20.53
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.7%
Platinum
894.10
-0.3%
Palladium
996.00
-0.6%
Gold
2,194.02
-0.0%
Silver
24.42
-0.9%
Brent Crude
86.09
-0.2%
Top 40
67,905
+0.3%
All Share
74,106
+0.3%
Resource 10
56,200
+1.0%
Industrial 25
103,604
+0.3%
Financial 15
16,488
-0.2%
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