The Hungarian forint and the Polish zloty were among the top performers against the dollar. Ukraine’s dollar bonds were also some of the main advancers across emerging-markets, with notes due 2036 climbing to the highest since March before paring the move, while shares of companies that have exposure to Ukraine surged in Warsaw, Frankfurt and London.
“The CEE currencies are the main beneficiaries of growing market optimism that yesterday’s historic meeting of European leaders with Trump in the White House will bring President Zelenskiy and his Russian counterpart Putin to a negotiating table,” said Piotr Matys, a currency analyst at In Touch Capital Markets Ltd.
Monday’s gathering in Washington between Trump, Ukraine’s Volodymyr Zelenskiy and European leaders was seen as a successful step ahead of a potential summit between Russia’s Vladimir Putin and Zelenskiy. On Tuesday, Trump urged both leaders to show “flexibility.”
The broader MSCI gauge of developing currencies was slightly down on Tuesday, dragged lower by the Colombian peso and the Brazilian real. A sister index tracking emerging-market equities also edged lower.
Brazilian assets were some of the biggest laggards, hit by investors’ concerns over the impact of the Magnitsky Act across the nation’s financial institutions and a potential escalation of Trump’s tariff war against the Latin American nation.
The Brazilian real fell as much as 1%, also pressured by a stronger dollar and lower oil prices. Latin American peers were also edging lower, with the Colombian peso leading losses.
“There is a lot of friction between the US and some countries in Latin America,” said Juan Perez, director of trading at Monex USA. “Economic data from the US or elsewhere is not impressive and it’s giving the dollar a chance to recover against certain emerging currencies that are not being stimulated by anything.”
