EMERGING MARKETS-EM currencies stay caged as markets await Trump–Putin summit

By Pranav Kashyap

Aug 14 (Reuters) - Most emerging market currencies held to a tight range on Thursday as investors kept bets light ahead of a closely watched summit between U.S. President Donald Trump and Russia’s Vladimir Putin.

A gauge tracking emerging market equities .MSCIEF cooled 0.4% after its strongest intraday gain in more than a month that had carried it to a near four-year peak in the previous session.

On Wednesday, Trump warned of "severe consequences" if Putin balks at a Ukraine peace deal, but he also floated a swift follow-up meeting that would bring in Ukrainian President Volodymyr Zelenskiy, easing jitters about Kyiv being sidelined in Alaska.

Trump's remarks, along with the outcome of a virtual meeting he held on Wednesday with European leaders and Zelenskiy, offered some reassurance.

"If the Trump–Putin summit delivers progress toward a ceasefire, we expect market focus to shift further toward Ukraine's reconstruction," UBS analysts said.

"Central and eastern European FX is benefiting from a weaker U.S. dollar and the prospect of progress in the Ukraine-Russia conflict," ING analysts said in a note.

Ukraine's international dollar bonds nudged up after falling for two straight sessions. Equities of bordering nations took a dip, however.

Polish stocks .WIG20 dropped 1.3%, on course for their biggest intraday drop in two weeks, while Romanian equities .BETI slipped 0.4%.

An index tracking central and eastern European equities .MIME00000PUS fell 1.5%.

Romania's leu EURRON= was flat against the euro, with other regional currencies also largely subdued.

Fresh data showed Romania's economy grew more slowly than expected in the second quarter, further clouding the outlook.

Turkey's lira TRY= and stocks in Istanbul .BUX100 were flat. Turkey kept its year-end inflation mid-point at 24%, even as it nudged the 2026 forecast up to 16% from 12%, central bank Governor Fatih Karahan said.

In Asia, Vietnamese equities .VNI jumped 1.8% to a record high. Sources said the country made its first U.S. oil purchase this year, in a deal negotiated with Washington to avoid high U.S. tariffs and cut a trade surplus with the United States.

The Indonesian rupiah IDR= led gains in Asian currencies while others cooled as the dollar recovered after falling for two consecutive sessions, but still languished near multi-week lows. USD/

Emerging market currencies have been on a steady climb lately on a near‑sure September Federal Reserve rate cut, with CME's FedWatch showing odds almost fully priced in.

HIGHLIGHTS:

** Chile slashes its estimate for 2025 copper production growth

** Chinese investors eyeing Indonesia to avoid US tariffs, tap local market

** Argentina's annual inflation falls in July to lowest since 2020

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