November 26, 2019 / 9:51 AM / 8 months ago

EMERGING MARKETS-EM currencies weaken versus dollar while growth fears pressure rand

* S. Africa at risk unless it rapidly reforms economy -IMF

* U.S., China hold phone call, discuss core issues

* Hungary's forint hits fresh all-time low

By Shreyashi Sanyal

Nov 26 (Reuters) - Currencies in the developing world traded slightly lower on Tuesday as the dollar strengthened on encouraging signals in U.S.-China trade relations, and with South Africa's rand weakening after a warning from the International Monetary Fund.

MSCI's index of emerging market currencies dipped 0.1%, while the dollar hit its firmest level in two weeks against Japan's yen earlier on Tuesday.

China's Commerce Ministry said top trade negotiators from both sides held a phone call on Tuesday, and discussed "core issues of concern".

"Investors are just waiting for more details before increasing their exposure to riskier assets, and definitely the dollar in this situation is benefiting," said Piotr Matys, emerging markets FX strategist at Rabobank.

"It's a bit of, why take the risk and trade in EM assets when you can just continue buying the dollar."

South Africa's rand weakened after the IMF said on Monday that the country faced a prolonged period of weak economic growth marked by rising unemployment, inequality and greater credit-rating risk if the government did not act fast to implement reforms.

"Nothing new from the IMF, it is just a reminder that there are some serious issues and tremendous challenges South Africa faces to try and put the economy on a sustainable path," said Matys.

The warning came as South Africa dodged a sovereign rating downgrade from S&P Global Ratings.

The Turkish lira remained range-bound, while Turkish stocks edged slightly lower.

Russia hopes to seal a deal to supply Turkey with more S-400 missile systems in the first half of 2020, which analysts feel could pressure the lira by further antagonising the United States, a country Turkey has had volatile relations with in recent times.

Currencies in central and eastern European economies including Poland and Romania dipped slightly against the euro. Hungary's forint touched a new record low, extending declines to a sixth straight session.

Asian stocks were bolstered by the new developments in the Sino-U.S. trade dispute and as Chinese e-commerce giant Alibaba made a strong Hong Kong debut in the world's largest share sale so far this year. However, the Hang Seng index ended the day slightly lower.

For GRAPHIC on emerging market FX performance 2019, see For GRAPHIC on MSCI emerging index performance 2019, see

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Pravin Char)

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