EMERGING MARKETS-FX, stocks pull back but set for weekly gains on trade optimism

By Purvi Agarwal

July 25 (Reuters) - Most emerging market currencies weakened and stocks pulled back on Friday, as investors took stock of their holdings and braced for an upcoming week packed with central bank meetings, U.S. data and President Donald Trump's tariff deadline.

MSCI's index tracking global EM currencies .MIEM00000CUS was down 0.3%, as most Asian currencies depreciated against the dollar. The index, however, was set to log weekly gains after two weeks of losses.

This week, markets took on more risk after the U.S. signed a trade deal with Japan and signalled that more agreements were in the works, reviving some hopes that the worst tariff impacts could be avoided.

However, investors were cautious with risk assets in order to brave the upcoming week, which will feature U.S. jobs data, a meeting of the Federal Reserve and Trump's August 1 tariff deadline.

On the day, South Africa's rand ZAR= fell 0.7%. Most emerging European currencies were subdued against the euro.

"We would expect market swings to be temporary ... trade negotiations will ultimately lead to moderate policy, but we expect a tariff-led economic slowdown to be mild and short-lived, rather than recessionary," said Mark Haefele, chief investment officer at UBS Global Wealth Management.

Turkey's lira TRYTOM=D3 was 0.7% higher against the greenback, a day after its central bank delivered a surprise 300 basis point interest rate cut. The currency eyed its biggest one-day gain since June 2024.

Worries over the independence of the Fed also remained, with Trump's calls for lower interest rates persistent despite his reiterating he was not planning to fire the Fed chair.

Haefele said these fears, along with lower interest rates could continue to impact the dollar, and investors could look to reduce their holdings.

Russia's rouble RUB= was down 0.4% against the greenback, over-the-counter-market data showed, ahead of a central bank decision where it is expected to cut rates by 200 basis points.

Stocks in the region also pulled back after two days of gains, with MSCI's EM stocks gauge .MSCIEF down 0.8%. It was still set for a second week of gains, however.

Equities in Poland .WIG20 fell 0.6%, while Hungary's .BUX were down 0.2%. Turkish stocks .XU100 were little changed, though set for their fifth week of gains, their longest winning streak since December.

South African equities .JTOPI slipped 0.7%, as gold miners weighed, tracking lower prices of the bullion.

In Senegal, international bonds extended their rally, with dollar bonds maturing in 2033 gaining more than 1 cent to the dollar.

The International Monetary Fund said on Thursday it would send a mission to Dakar next month to discuss the nation's debt misreporting case and a potential new programme.

Meanwhile, Fitch and Moody's will review their rating on Turkey, while Kenya and Bulgaria are also due a review.

HIGHLIGHTS:

** Britain and India sign free trade pact during Modi visit

** Shanghai bourse gives bond investors a taste of high yields with new framework, sources say

** India's RBI to hold rates in August, expected to cut again later this year

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