EMERGING MARKETS-Forex, stocks broadly higher after Trump's Fed comments pressure dollar

By Purvi Agarwal and Ragini Mathur

June 26 (Reuters) - Most emerging market currencies gained on Thursday as the dollar dipped following U.S. President Donald Trump's latest comments on the Federal Reserve chair, while stocks were mixed in the aftermath of the Iran-Israel ceasefire.

MSCI's index tracking global EM currencies .MIEM00000CUS was up 0.5%, set to extend its gains to the third session.

The dollar index =USD was down 0.4%, at its lowest level in more than three years, after a Wall Street Journal report said Trump has toyed with the idea of selecting and announcing Fed Chair Jerome Powell's replacement by September or October.

Trump has been critical of Powell's stance on interest rates in the world's biggest economy and has repeatedly called for cuts to stimulate growth, while Powell has maintained a cautious stance to brace for any fallout from the president's tariffs.

"The initial reaction is dovish, because we know what Trump's intention to cut rates earlier than the Fed is indicating ... so any change in the Fed board is going to be more dovish," said Frantisek Taborsky, EMEA FX and fixed income strategist at ING.

Investors were still assessing the Iran-Israel ceasefire declared on Tuesday, which put an end to a 12-day air war that had threatened to develop into a broader conflict with the potential to disrupt oil supply through the Strait of Hormuz.

The U.S. said it will hold nuclear talks with Iran next week, while Trump signalled that the U.S. may ease some oil sanctions on Iran.

Assets in the Middle East held steady, with Israeli stocks .TA125 flat and Turkish stocks .XU100 down 0.1%.

Israel's shekel ILS= was up 0.5% while Turkey's lira TRYTOM=D3 was little changed.

Many markets in the Middle East were closed for a public holiday on Thursday, including in Jordan where the International Monetary Fund disbursed $834 million on Wednesday, under two of its facilities.

The euro gained on the dollar weakness, pressuring currencies in emerging European markets. Hungary's forint EURHUF= fell 0.3%, underperforming peers.

In South Africa, the rand ZAR= appreciated 0.9% against the dollar, trading at its highest level since early November, while its stocks .JTOPI were up 0.9%, ahead of the monthly producer price index figures.

South Africa recorded FDI inflows of 11.7 billion rand ($661.46 million) in the first quarter of 2025, higher than in the fourth quarter of last year.

MSCI's gauge of equities .MSCIEF was up 0.5%. Regional bourses were mixed, with those in Poland .WIG20 and Hungary .BUX up 1.6% and 0.4% respectively, while Romania's .BETI was down 0.2%.

HIGHLIGHTS:

** China's collateral demands curbing EMs' ability to manage finances, study shows

** South Korea central bank adjusts open market operation to boost money supply

** JPMorgan lifts MSCI EM equities index forecast on easing trade uncertainty

For TOP NEWS across emerging markets nTOPEMRG

For CENTRAL EUROPE market report, see CEE/

For TURKISH market report, see .IS

For RUSSIAN market report, see RU/RUB