Emerging Markets Navigate Interest Rate Shifts

Emerging market stocks saw gains amid mixed currency movements. Hungarian forint fell against the euro due to central bank actions, while most other European currencies stayed stable. Investors are cautious about U.S. interest rate paths and potential global economic risks in 2025.

Emerging market stocks showed an upward trend on Monday, while currencies displayed a mixed trajectory. Traders are assessing the U.S. interest rate developments and their impact on riskier emerging market assets anticipated in 2025.

The Hungarian forint incurred a 0.6% drop against the euro, trading at 414.38 per euro, a decline after the central bank raised the implied forint interest rate in a FX swap tender. The forint has decreased nearly 9% this year.

Elsewhere, emerging European currencies mostly remained unchanged against the euro. Stocks, however, experienced gains, with Poland's WIG20 index rising by 0.7%, driven by Budimex's shares increasing by 2.1% and Hungary's main index growing by 0.7%.

(With inputs from agencies.)