South African advanced on Friday in anticipation of the Treasury budget message next week, while losses in most other emerging market currencies were limited due to broad-based USD retreat.
The rand rose 0.3%, extending losing streak to a third day on Friday as investors expect positive revisions of the economic forecasts on the state of the country's economy from Treasury Minister next Wednesday.
MSCI Emerging Markets Currency Index rose 0.2% against USD, indicating revival of risk-on mood after a brief period of anxiety in the first half of the week. Chinese yuan strengthened indicating inflows into Chinese assets and improving faith into the global recovery.
The Turkish lira was sluggish after the central bank left interest rate unchanged at 17% trying to extend status-quo. Turkish Central Bank is expected to gradually cut the rate to 14.00% in the second half of the year easing pressure on USDTRY.
Lira's gain is likely to continue for the fifth straight week as hopes for a tight monetary policy maintain interest in the currency which depreciated significantly due to interest rate volatility.
Russian ruble continued its slide due to sell-off in oil. The weakness in the Russian currency is also propelled by the threat on new sanctions which deter investors from Russian debt, hampering carry trade flows.
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