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March 7 (Reuters) – Most currencies in Europe’s emerging markets traded in a tight range on Thursday as investors held back from making bets ahead of the European Central Bank’s latest monetary policy verdict, while a broader gauge of stocks nudged higher.

By 0908 GMT, MSCI’s index for emerging market stocks .MSCIEF gained 0.2%, touching fresh seven-month highs, while a gauge for currencies .MIEM00000CUS advanced 0.1%.

Equities in Taiwan .TWII closed 1.0% higher, and shares in South Korea .KS11 gained 0.2%.

Thursday’s big-ticket event for global markets is the ECB’s interest rate decision at 1315 GMT. The bank is expected to keep rates at a record high of 4%. Its president, Christine Lagarde, will hold a press conference 30 minutes after the announcement.

“It may be too soon to change policy tack, but markets may get carried away with lower rates if Lagarde sounds reassuring on wages and the inflection point last quarter,” Societe Generale strategists wrote.

Poland’s zloty EURPLN= weakened 0.1% against the euro a day after its central bank lowered its inflation forecasts for 2024 and 2025 and kept interest rates unchanged at 5.75%.

The Hungarian forint EURHUF= lagged local peers, down 0.5%, while the Czech crown EURCZK= was flat at 25.352 per euro.


Stocks were off to a mixed start with Poland’s WIG 20 .WIG20 down 1.5%, while Turkish shares .XU100 gained 1.7%.

Poland’s biggest lender PKO BPPKO.WA fell 2.6% after posting a 60% drop in fourth-quarter net profit.

South Africa’s rand ZAR= was flat against the dollar after rising for five straight sessions, supported by higher gold prices and a softer U.S. dollar. GOL/

The dollar index =USD remained on the back foot as traders backed the idea that the Federal Reserve could be looking to reduce lending costs this year despite some upside surprises on the inflation front. FRX/

Elsewhere, Malaysia’s ringgit MYR= strengthened 0.6% against the dollar after the Asian country’s central bank kept its benchmark interest rate unchanged for the fifth straight meeting.

Meanwhile, bets on lower interest rates in the United States, even with a cloudy outlook, were behind a fourth consecutive month of overall foreign net flows to emerging markets in February, the Institute of International Finance said.


(Reporting by Shashwat Chauhan in Bengaluru; Editing by Ros Russell)