EMERGING MARKETS-EM assets poised for weekly losses after strong run in early September

By Nikhil Sharma

Sept 26 (Reuters) - Emerging Market assets were headed for weekly losses on Friday, with investors booking profits in a week dominated by key regional central bank decisions and U.S. President Donald Trump's latest tariff threats.

The MSCI index of emerging market equities .MSCIEF fell 1.4%, on track for its biggest one-day drop since April 7. It was also set for its first weekly loss in four.

"We have a couple of days of a little bit of downturn, but realistically, it's been a very strong performance of equity markets earlier this month," said Marija Veitmane, global head of Equity Strategy for State Street Markets, adding "Small corrections are all positive."

Friday's losses reflected risk-averse global market sentiment after Trump announced new import tariffs, including 100% duties on branded drugs.

A gauge of regional currencies .MIEM00000CUS fell 0.2%, on track for a seventh straight decline -- the longest streak in more than two months.

The Hungarian forint EURHUF= was set to end a four-week gaining streak. Hungary's central bank kept policy easing on pause Tuesday, at the European Union's joint highest rate of 6.50%, while forecasting tighter policy to curb inflation.

The currency extended losses to a fourth session on Friday, down 0.33%. Meanwhile, Budapest equities .BUX snapped four days of losses to advance 0.33% too.

The Czech Republic's central bank also stood pat on interest rates earlier this week as it voiced the need for tight policy in view of inflationary risks.

The Czech crown EURCZK= neared its first weekly decline in six weeks, down 0.1%, while Prague equities .PX looked set for a fourth consecutive weekly gain, up 1.14%.

Local markets will be tested by the elections on October 3 and 4, with polls favouring the opposition ANO party of former Prime Minister Andrej Babis over the main centre-right ruling parties.

With no party expected to win a majority, an ANO-led coalition could end defence supplies to Ukraine, reject the EU's emissions-allowance system, and bring independent public broadcasters under direct budget funding.

Separately, moves in Polish stocks .WIG20 and the zloty EURPLN= were largely flat for the week.

Renewed strength in the U.S. dollar pressured EM currencies as investors trimmed bets for deeper rate cuts, after cautious indications from the Federal Reserve's speakers this week.

Attention now turns to the release of U.S. consumer spending data later on Friday for further signals on the policy outlook.

The Indian rupee INR=IN, hurt by a U.S. H1-B visa fee hike, was stable after a sharp selloff earlier this week prompted likely central bank intervention.

The BRICS-backed New Development Bank plans to issue its first rupee bond in India before March 2026, aligning with India's push to internationalize the currency.

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