Global Markets React: Emerging Currencies Steady Amid Ceasefire and Economic Speculations

Emerging market currencies held steady while stocks surged as investors evaluated potential U.S. interest rate cuts and the implications of a ceasefire between Israel and Hamas. Despite Israel's benchmark stock index hitting an all-time high, the shekel lost momentum. Regional economists view the ceasefire positively for growth.

In a notable shift in market dynamics, emerging market currencies maintained stability as stocks saw a robust rally on Thursday. This movement came amid investor assessments of imminent U.S. interest rate cuts and the ramifications of a newly brokered ceasefire deal between Israel and Hamas.

Israel's benchmark stock index reached unprecedented levels, currently up by 0.2%, following a broad market rally that was fueled by the potential conclusion of the protracted 15-month conflict. Nevertheless, the shekel retreated from its one-month high as reports emerged of Israeli actions in Gaza, shortly after the ceasefire announcement.

Fitch Ratings highlighted the ceasefire's stabilizing impact on Israel's economic outlook. Economists, like Marc Ostwald from ADM Investor Services, noted that while regional growth prospects appear positive, conflict remains a persisting threat. Potential reductions in shipping and insurance costs are anticipated, benefiting trade and favoring emerging markets, notably in Asia and the Middle East.

(With inputs from agencies.)