EMERGING MARKETS-FX set for best month of 2021; weak data from China weighs

* Chinese factory activity growth slows in April

* Turkey extends dismissal ban

* The dollar falls for the fourth consecutive week

April 30 (Reuters) – Disappointing Chinese data pushed emerging market currencies and equities down on Friday, but currencies were still on track to post their best month of the year.

Chinese factory activity growth slowed and missed forecasts in April as supply bottlenecks and rising costs weighed on production and overseas demand lost momentum .

This led to a 0.1% drop in the MSCI Emerging Market Currency Index, while the Equity Equity Index fell 0.8%, its worst day in more than a week.

The MSCI Currency Index was up 1.6% in April, its best month since December, and stocks rose 2.8% this month, their biggest monthly gain since January.

The South African rand fell 0.9% as private sector credit growth slowed in March, but the currency was expected to gain for a third consecutive month and was the top monthly gainer among its emerging market peers.

The Turkish lira slipped 0.4%, but is expected to gain nearly 1% for the week.

Strict central bank monetary policy coupled with governance measures, like an extension of the layoff ban, have helped the read in recent sessions. However, he was the worst performer this year.

“The main advantage of revising the forecast upwards is that the CBT (Central Bank of Turkey) now has even less basis to cut the benchmark rate in the coming months,” said Tatha Ghose, analyst at Commerzbank.

Turkey’s central bank will keep interest rates unchanged until the fourth quarter due to price pressures, Morgan Stanley said Thursday, adding that any premature cut would put heavy pressure on the lira.

“If April, indeed, turns out to be the peak of inflation, after which there will be constant moderation, then rate cuts will follow,” Ghose said.

The Russian ruble was 0.1% weaker against the dollar, moving away from its April highs ahead of the extended May holiday declared by President Vladimir Putin.

Most central European currencies eased against the euro, with the Hungarian forint, the Czech crown and the Polish zloty falling between 0.1% and 0.2%.

On Friday, the US dollar was expected to experience its fourth consecutive weekly decline against a basket of major peers, and to experience its worst monthly decline since July of last year as the Federal Reserve sticks to its extremely low interest rate message. for longer, coupled with huge stimulus packages. For GRAPHIC on the performance of emerging market currencies in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on the performance of the emerging MSCI index in 2021, see tmsnrt.rs/2OusNdX

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For the CENTRAL EUROPE Market Report, see

For the TURKISH market report, see

For the report on the Russian market, see (Reporting by Shashank Nayar in Bengaluru; Editing by Amy Caren Daniel)

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