EM Turkey Currency Hit alltime Low; Stocks at 1Month High


TRY at 8.56 per dollar

Eyes on U.S. inflation data t 1230 GMT

MSCI EM stocks index up 0.3

Mainland CHina, Turkey stocks fall

May 28 Reuters Emerging market currencies touched new highs on Friday but a rising dollar ahead of U.S. inflation data tempered gains, with Turkeys lira hitting alltime lows.

The greenback moved further away from recent lows with all eyes on U.S. inflation data due at 1230 GMT, as a high reading could fuel expectations of policy tightening by the Federal Reserve.

Emerging market currencies had enjoyed a rally as easy monetary policy expectations sent investors seeking high yielders.

The lira fell 0.6 to 8.564 per dollar. Investors will be watching for an SP ratings review due after the market close.

Turkeys currency is headed for its fourth straight month in the red as losses intensified this week when a fourth central banker was replaced by President Tayyip Erdogan in two months, heightening questions about the monetary authoritys autonomy.

Each burst of depreciation risks triggering a fresh lira crisis as it begins to feed back into higher inflation, which the central bank cannot fight off because it is unable to credibly hike rates due to Erdogans opposition, said Tatha Ghose, an FX strategist at Commerzbank.

Because of its inability to hike rates properly, the central bank relies on inflation to cool off via external or other factors so that it can enjoy even a short period of stability.

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