* Zloty set to add 2% to the USD this week
* EM stocks retreat, set for weekly losses
* Russian rouble among worst weekly performers
April 9 (Reuters) - Emerging-market currencies retreated on
Friday after the dollar bounced back from two-week lows, but
were set to rise for the week with the Polish zloty marking
large gains after the central bank held lending rates.
Russia's rouble and the South African rand led
losses across currencies in Europe, the Middle East and Africa
(EMEA), while the MSCI's index of emerging-market currencies
But the index was set to add about 0.2% for the week,
benefiting from recent weakness in the dollar and U.S. Treasury
yields. While the dollar rose from two-week lows on Friday, it
was still set for its worst week this year, following dovish
comments from the Federal Reserve.
"The Fed has been trying for a long time to dampen
expectation of an imminent normalisation of monetary policy ...
Against this backdrop economic data coming in below expectations
can put a dampener on the dollar. That means the dollar has not
been able to turn the tables in its favour," analysts at
Commerzbank wrote in a note.
Following this sentiment, U.S. yields had retreated through
the week, while emerging-market debt saw strong inflows.
High-yielding currencies such as the rand also marked strong
gains for the week.
Central European currencies were all set for weekly gains,
with the Polish zloty rising the most against
the dollar and the euro after the Polish central bank held
interest rates earlier in the week.
The zloty was set to be the best-performing EMEA currency
for the week, adding about 2% to the dollar and 0.8% to the
Recent weakness in the dollar and U.S. yields came as a
source of relief for emerging market assets, which are largely
trading down for the year amid pressure from an increase in U.S.
Bucking the trend, Russia's rouble was set for a fourth
straight weekly loss, its worst losing streak since the height
of the COVID-19 pandemic last year.
Recent losses in the currency were driven by concerns over a
possible military conflict between Russia and Ukraine, as well
as Western criticism of Moscow's treatment of prominent Kremlin
critic Alexei Navalny.
Turkey's lira was muted for the week, with investors
remaining wary over the country's financial credibility after
major shifts in central bank governance over the past two years.
Emerging-market stocks fell for the day, and were set for
mild weekly losses.
For GRAPHIC on emerging market FX performance in 2021, see http://tmsnrt.rs/2egbfVh
For GRAPHIC on MSCI emerging index performance in 2021, see https://tmsnrt.rs/2OusNdX
For TOP NEWS across emerging markets
For CENTRAL EUROPE market report, see
For TURKISH market report, see
For RUSSIAN market report, see
(Reporting by Ambar Warrick in Bengaluru, editing by Larry