Emerging Markets Struggle Amid Trump's Policy Uncertainty

Emerging market currencies faced monthly losses due to President-elect Donald Trump's policy uncertainties and tensions between Russia and Ukraine. MSCI's index showed significant declines, as Trump's policies could trigger a global trade war and increase U.S. inflation. Meanwhile, inflation in Poland rose, and Georgia halted its EU bid.

Emerging market currencies were poised for monthly losses on Friday, burdened by uncertainties surrounding U.S. President-elect Donald Trump's upcoming policies and heightened geopolitical tensions between Russia and Ukraine.

MSCI's index for emerging market stocks remained steady at 1,079.34 points as of 0912 GMT. However, the benchmark has been pinned near its lowest in over 11 weeks, reflecting a broader sell-off of EM assets starting from Trump's electoral victory. The escalation of the conflict between Russia and Ukraine added to the downward pressure.

The market has been carefully assessing Trump's stance on trade, tariffs, and immigration, with fears that they might spark a global trade war and heighten inflation in the United States. These concerns have lent support to the dollar, further pressuring EM currencies.

(With inputs from agencies.)