(Bloomberg) -- Emerging-market currencies closed little changed after being whipsawed in a session marked by low trading volume before the US holiday and a steep selloff for Brazilian assets.

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Losses for Brazil’s real mixed with gains for Eastern European currencies with the MSCI EM currency index closing flat. Earlier in the session, the gauge was pushed lower by US data that showed the US Federal Reserve’s preferred measure of underlying inflation accelerated in October, backing bets for a slower pace of interest rate cuts.

A companion index for emerging stocks closed slightly higher.

Brazil’s real tumbled 2.1% to its weakest since 2020 on news that President Luiz Inacio Lula da Silva wants to present a plan for income tax exemptions alongside proposed public spending cuts, watering down the impact on the fiscal deficit. The stock market slumped and swap rates surged.

Investors across emerging markets remain wary of US President-elect Donald Trump’s latest threats to impose stiff tariffs on imports from China, Canada and Mexico. The dollar slipped in the session, but Barclays strategist Erick Martinez said it is poised to continue its recent trend.

“We see little reasons for a reversion of the strong dollar trend,” he said. “US data remains resilient, which adds to inflationary risks from tariffs. These risks should keep rate differentials moving in favor of the dollar.”

Mexico’s peso shook off early losses after officials there warned Trump’s tariffs would cause massive US job losses and more expensive pickup trucks. President Claudia Sheinbaum said her team was in touch with Trump’s transition team and they would speak in the coming days.

“Mexico’s government has a plan, they can talk to Trump and work together,” said Gabriela Siller, head of research at Grupo Financiero Base.

The tariff threat has weighed on emerging markets since Trump’s election victory and remains a wild card for 2025. MSCI’s emerging-market stock gauge is headed toward a second consecutive monthly drop in November, and the worst quarter since September 2022.

Chinese stocks had gained earlier as speculation intensified that authorities will roll out fresh stimulus measures next month amid the threat of US imposed tariffs.

Hints of more aggressive policy support emerged earlier this month when China’s Finance Minister Lan Fo’an pledged “more forceful” policies for 2025. These comments fueled speculation that Beijing could unveil bolder measures following Trump’s inauguration in January.