An MSCI Inc. gauge of developing-nation currencies rose 0.1% as of 11:20 a.m. in New York. The index pared gains after the US jobs data, but resumed its modest advance after White House National Economic Council Director Kevin Hassett said he sees plenty of room to substantially lower interest rates.
Traders expect the Fed to lower borrowing costs by 25 basis points later this week in a dissenting decision. Attention will turn to how hawkish the statement is and whether policymakers could ease again at the January meeting.
“The Fed will likely produce a ‘hawkish cut’ for markets,” said Juan Perez, senior director of trading at Monex USA. “We foresee a lack of consensus and varied conclusions regarding the economy.”
The Mexican peso and Indian rupee were among the best performers in a basket of 23 exchange rates tracked by Bloomberg. The Brazilian real showed signs of stabilizing following waves of selling since former populist leader Jair Bolsonaro’s son emerged as a contender in next year’s presidential race.
Emerging-market equities fell for the first time in four days after a Politburo meeting of the Chinese Communist Party disappointed investors seeking greater stimulus.
Stocks have made a sluggish start to December after their first monthly loss of 2025 on concern the AI stocks that underpinned this year’s rally won’t sustain momentum. At the same time, equities are still on course for their biggest annual gain — and the first year they’ve outperformed US stocks — since 2017.
“The semiconductor sector in Asia has become quite concentrated given the sharp rally over the past quarter,” said Rajat Agarwal, an equity strategist at Societe Generale SA “The sector had run off a bit far from what could be explained by fundamentals.”
Officials at China’s December Politburo meeting adopted a confident tone about the world’s second-biggest economy despite underlying signs of weakness. That concerned investors who had looked for stronger language signaling expanded stimulus measures.
Hungary’sforint was among the best performers in emerging markets, rising both against the euro and dollar. The nation’s inflation rate dropped more than expected, returning to within the central bank’s tolerance band for the first time in a year.
To BofA Securities strategists, the forint is overvalued and the difference in positioning compared with the government’s bonds is unsustainable.
