* Russian stocks among the few winners in the EMEA zone
* Hungarian forint drops after bank holds rates
* MSCI EM stock market index down 0.5%
Jan. 27 (Reuters) – Most emerging market stocks and currencies fell slightly on Wednesday as investors waited for more clues about US monetary policy from the Federal Reserve, while Russian stocks rose after Moscow lifted some COVID-19 brakes.
The Turkish lira and South African rand fell about 0.3% and 0.2% against the dollar, respectively, as investors expect the US central bank to hold interest rates and reaffirm its accommodating outlook.
Most other currencies in Europe, the Middle East and Africa remained in tight ranges as investors were uncertain about the Fed’s stance on increased budget spending in the United States.
The dollar was down before the Fed’s announcement, while US yields also fell.
“A Fed willing to do whatever it takes to support the world’s largest economy, no matter what the government does, is likely to turn negative for the USD … an accommodating message could revive trade at risk, ”said Charalambos Pissouros, senior market analyst at JFD Group, wrote in a note.
The prospect of loose monetary policy has greatly benefited emerging market equities, which have outperformed their developed country counterparts since late last year.
The MSCI Emerging Markets Equity Index fell 0.5% on Wednesday, after recently hitting a record high.
The Russian ruble was stable against the dollar after modest gains on Tuesday. Russian stocks rose 0.2% after Moscow relaxed a nighttime curfew and restrictions on the number of employees working in offices.
Investors are also anticipating Russian unemployment and December GDP data this week.
Rising coronavirus cases and slower-than-expected vaccine roll-out have hurt emerging market currencies in recent sessions, offsetting optimism about a possible economic recovery this year.
In central Europe, the Hungarian forint lagged against the euro after the country’s central bank left interest rates unchanged.
Most central European stocks edged up.
For GRAPHIC on the performance of emerging market currencies in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on the performance of MSCI emerging indices in 2021, see tmsnrt.rs/2OusNdX
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For the report on the Russian market, see (Reporting by Ambar Warrick in Bengaluru. Editing by Mark Potter)