Reuters: US Dollar Report: EMERGING MARKETS-Stocks broadly weaker before Fed decision; rand firms

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EMERGING MARKETS-Stocks broadly weaker before Fed decision; rand firms Jun 19th 2013, 09:53 LONDON, June 19 | Wed Jun 19, 2013 5:53am EDT LONDON, June 19 (Reuters) - The rand firmed to five-day highs on Wednesday after better-than-expected South African current account data but most other emerging assets were broadly weaker as investors awaited clarity on the U.S. Fed's next policy step. Markets are hoping the Federal Reserve will sweep away ambiguity over plans to wind down the U.S. bond buying programme at the end of its two-day meeting. The policy-setting Federal Open Market Committee will announce its decision at 1800 GMT, and Fed Chairman Ben Bernanke will hold a news conference 30 minutes later. The benchmark emerging stocks index fell 0.3 percent, pressured by weakness in Shanghai markets where shares fell to six-month lows after an official news report dampened hopes for policy easing. Russian equities fell 1 percent, hit by worries over a weakening rouble. The rand was boosted by data showing the first quarter current account gap, a major worry for South Africa, had unexpectedly narrowed to 5.8 percent of gross domestic product. Monthly inflation too slowed more than expected in May. "There are still large monthly trade deficits to come ... which may continue to spook the markets but for now at least the 'dual deficit' concern should ebb somewhat," said Peter Attard Montalto, an emerging market economist at Nomura. South African five-year credit default swaps were at their lowest level since June 7, according to data from Markit. Stocks fell 0.7 percent. The Turkish lira firmed after the central bank dropped its usual fixed-rate repo auction in line with its monetary tightening plans. Anti-government protests continued overnight, but with a less violent tone. Turkish stocks moved higher while the CDS dropped to 158 from 163, according to Markit. Earlier in Asia, investors were keeping an eye on the deepening liquidity squeeze in China where the central bank has refused to inject cash despite a surge in money market rates to multi-year highs. Link this Share this Digg this Email Reprints

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