Emerging markets currencies were on track for their worst week since February on Friday, as the U.S. dollar rebounded after five straight weeks of losses on bets of another Federal Reserve interest rate hike in May.

The MSCI's index for emerging market currencies slipped 0.2% and was on track to end the week 0.6% lower as the dollar strengthened.

Hungary's forint extended losses for a third straight session, down 0.5% against the euro, as comments from Hungarian central bank Deputy Governor this week signalling what could be the region's first rate cut continued to weigh.

The forint was on track for its worst week since mid-March, while the Polish zloty outperformed central and eastern European peers.

Among bonds, Egypt's dollar-denominated government notes extended losses, with the issue maturing in 2024 falling more than 1.1 cents and hovering near a record low, Tradeweb data showed.

"It is obvious that a confidence issue has surfaced and credible action is needed to regain the trust of markets," JP Morgan economists said in a note.

Emerging market stocks slid 0.9% and were also on track for weekly losses.

China's blue-chip CSI300 Index and the Shanghai Composite Index both closed 2% lower, while Hong Kong's benchmark Hang Seng Index ended 1.7% lower.

Equities in China and the yuan are headed for weekly losses with investors largely shrugging off better-than-expected domestic economic data and worries about an uneven recovery in the world's second largest economy.

Nevertheless, BofA Global Research and other banks raised their forecast for China's 2023 gross domestic product (GDP) growth this week.

Foreign investors also increased their holdings of China's onshore yuan bonds in March, the foreign exchange regulator said, expecting more capital inflows amid signs of economic recovery.

Russia's rouble weakened against the dollar, with lower oil prices blunting the impact of upcoming month-end tax payments that usually benefit the currency

Group of Seven (G7) countries are considering a near-total ban of exports to Russia, Kyodo news agency reported, citing Japanese government sources.

The Turkish lira was flat against the greenback, while South Africa's rand slipped 0.4%.

Chile's President Gabriel Boric said on Thursday he would nationalize the country's lithium industry, the world's second largest producer of the metal essential in electric vehicle batteries, to boost its economy and protect its environment.

(Reporting by Bansari Mayur Kamdar in Bengaluru and and Marc Jones in London; Editing by Alexander Smith)