Most emerging market currencies steady in lead-up to US data

Most emerging market currencies were range-bound on Tuesday, as investors waited to see the dollar's moves during a week packed with global economic data, including a crucial US jobs report.

Investors were focused on a US ISM manufacturing survey due later in the day, while Friday's all-important August nonfarm payrolls (NFP) report could offer clues on the magnitude of an expected rate cut by the Federal Reserve later this month.

"We think the (ISM) reading should revert higher, further allaying fears over the state of the labour market, an outcome that should see the greenback extend gains heading towards Friday," analysts at Monex Europe wrote in a note.

Any clues on the state of the US labour market will be carefully scrutinised, given Federal Reserve Chair Jerome Powell's dovish tilt last month, and his emphasis on the jobs markets.

Currencies in Central Eastern Europe (CEE) were largely muted, with Hungary's forint, Poland's zloty and the Czech crown all trading more or less flat against the euro.

Data showed Czech real wages increased for a second straight quarter in the April-June period, while Hungary's economy expanded 1.5 per cent in the second quarter year-on-year.

Most currencies in Asia were lower, with Philippine's peso lagging with a 0.2 per cent fall.

Turkey's lira slipped 0.3 per cent against the dollar after official data showed Turkish inflation eased to 51.97 per cent in August, just below expectations.

Nicholas Farr, emerging Europe economist at Capital Economics, said that while he sees continued disinflation in Turkey over the coming months, "there are signs in the breakdown that underlying inflation pressures remain strong and we still think that the central bank won't feel ready to cut interest rates this year."

South Africa's rand slipped 0.3 per cent ahead of the release of second quarter GDP figures, while the local stocks benchmark edged 0.1 per cent higher.

As of 0825 GMT, MSCI's index for emerging market stocks dipped 0.3 per cent, while a gauge for currencies slipped 0.1 per cent.

Later this week, interest rate decisions in Argentina, Chile, Poland, Malaysia and Egypt are likely to be on investors' radar.

Investors would also look out for comments from African leaders in China ahead of the ninth Forum on China-Africa Cooperation (FOCAC) Summit later this week.