Emerging Markets Steady Amid Trump's Inauguration and Middle East Ceasefire

Emerging market currencies remained stable as investors eyed Donald Trump's inauguration and developments in the Middle East, including a potential ceasefire deal between Israel and Hamas. Despite concerns over Trump's trade stance, EM markets experienced minor gains, bolstered by softer U.S. inflation data and reduced Treasury yields.

Emerging market currencies remained stable on Friday as investors showed caution in anticipation of U.S. President-elect Donald Trump's impending inauguration. Developments in the Middle East, including a potential ceasefire deal between Israel and Hamas, also occupied investors' attention.

Attention was focused on the Israeli cabinet's meeting, expected to finalize a ceasefire agreement and the release of hostages with Hamas. The Israeli shekel seemed poised for its best week since November, with government dollar bonds holding steady.

While MSCI's index of emerging market currencies remained flat, it was set for its first weekly gain in seven weeks. However, cautious sentiment persisted among investors ahead of Trump's inauguration, as concerns over U.S. tariff threats loomed large.

(With inputs from agencies.)