The South African rand, the Russian rouble and South Korea's won led emerging-market currencies higher on Wednesday, as the dollar weakened before a meeting of global central bankers that may offer clues on U.S. interest rates.
Amid rising worries of a global slowdown, expectations policymakers will turn to monetary and fiscal stimulus have run high, helping financial markets stabilise after a stormy week.
The won gained 0.4% to its highest in nearly three weeks amid easing tensions with Japan. The rand ZAR= rose 0.8% after South Africa reported inflation is slowing, increasing the chances the South African Reserve Bank will cut interest rates.
Minutes of the Federal Reserve's July meeting, due later on Wednesday, and comments from Fed Chair Jerome Powell at Jackson Hole, Wyoming, on Friday, could offer hints about further U.S. rate cuts.
"A lot depends on the Fed's stance, whether an indication of interest rate cuts is down to global growth expectations being lowered or larger systematic risks," said Roubesh Adaya, senior investment specialist, fixed income at Aberdeen Standard Investments. "Or if the Fed does nothing as well, that can be taken as an indication that things are not as bad as expected."
Russia's rouble gained 0.4% as prices for crude oil, the country's top export, rose above $60 per barrel. Its main stock index .IMOEX remained flat.
An index of emerging-market stocks rose for a fourth day. Chinese stocks ended flat as the U.S.-China trade war continued.
U.S. President Donald Trump said on Tuesday he had to confront China even if it caused short-term harm to the U.S. economy. Shortly afterward, the U.S. State Department approved an $8 billion sale of F-16 fighter jets to Taiwan, a decision likely to draw ire from China.
China's biggest e-commerce company, Alibaba Group Holding Ltd, delayed a possible $15 billion listing in Hong Kong amid growing political unrest there.
The Argentine peso recouped some of last week's losses after the central bank poured $112 million of its reserves into dollar auctions to boost the beleaguered currency.
(Reporting by Sruthi Shankar in Bengaluru, editing by Larry King) ((sruthi.shankar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6749 6328))
