Global Market Jitter: Emerging Markets React to U.S. Tariff Decisions

Emerging market currencies and stocks experienced a downturn on Thursday, as global investors processed statements regarding U.S. tariffs, poised for the impending August 1 deadline. Meanwhile, markets awaited significant U.S. economic data and pivotal central bank decisions.

Changes in U.S. trade policy included the reduction of tariffs on South Korea from 25% to 15% and certain Brazilian goods receiving exemptions. These policy shifts coincided with U.S. Federal Reserve Chair Jerome Powell maintaining interest rates, dampening expectations for a September cut, amid a flat dollar index.

Focus shifted towards macroeconomic indicators and potential tariff impacts on inflation. Market participants remained vigilant for any new trade announcements that could pave a less aggressive U.S. tariff strategy. Declines were observed across emerging markets, influenced further by China's manufacturing downturn for the fourth consecutive month in July.