Emerging Markets Gain in Week as Investors Ponder Trump Policies

LAGOS (Capital Markets in Africa) – Emerging-market currencies headed for their longest stretch of weekly gains in 20 months as investors questioned the pace of possible U.S. interest-rate increases. Ukraine’s hryvnia tumbled the most among peers and Turkey’s lira retreated after the biggest surge in more than a year.

The MSCI gauge of developing-nation currencies climbed for a second day. A similar equity measure was little changed on Friday, on course for its third weekly advance. Brazil’s Ibovespa headed for the highest level since the U.S. presidential election on Nov. 8. A lack of clarity over Trump’s plans to spur the economy has prompted some investors to bet U.S. rates will stay low, burnishing the appeal of higher-yielding assets.

South Korea’s won and Mexico’s peso led gains. The lira trimmed its drop on Friday after Turkey’s central bank refrained from offering cash to lenders via one-week repos for a second day, forcing them to borrow more at the overnight lending rate. The hryvnia tumbled to the weakest level since its collapse in February 2015 when Ukraine was mired in a pro-Russian insurgency in the nation’s easternmost regions and awaiting cash from the International Monetary Fund.