(Bloomberg) -- Emerging-market currencies oscillated between gains and losses as the risk-on sentiment following the Federal Reserve’s half-point rate cut faltered.

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The MSCI gauge for developing-market currencies was little changed, after gaining as much as 0.16% earlier in the day. Brazil’s real led declines in Latin America, falling for its first session in five, as traders awaited the government’s bi-monthly budget review. A companion index for EM equities climbed some 0.6% higher, led by shares in Taiwan and Hong Kong.

The Fed’s rate cut earlier this week triggered confidence that policymakers will be able to engineer a soft landing for the US. Still, investors remain worried about the global economy.

“Concerns about global growth are unlikely to dissipate entirely, while (geo)politics could further complicate the outlook for exposed economies and assets,” Barclays strategists including Andreas Kolbe and Sebastian Vargas wrote in a note Friday.

Currency Moves

Elsewhere in Latin America, Mexico’s peso dropped against the dollar, lagging its developing-nation peers. Traders are wagering that the Fed’s large cut will signal further easing from Mexico’s central bankers at their Sept. 26 meeting, which may chip away at the peso’s appeal.

In Asia’s FX markets, Indonesia’s rupiah was one of the biggest gainers on the back of rising bond inflows, supportive messaging from rate-setters and as China’s yuan — another top EMFX performer on Friday — received a boost from the People’s Bank of China’s stronger reference rate.

Thailand’s baht surged some 10% against the dollar since the end of June, putting the currency on course for its biggest quarterly gain since the Asian financial crisis. The baht’s gains have prompted calls from the country’s tourism and hotel sectors, and business chambers to temper the rally.

Traders also kept tabs on the Bank of Japan as it held borrowing costs steady. The yen underperformed after BOJ Governor Kazuo Ueda signaled there was no urgency on policymakers’ part to raise interest rates, lowering the risk of an October hike.

Credit, Equity Markets

In South Asia, Sri Lanka’s dollar bonds fell behind their emerging-market peers. Its assets look set for more losses amid risks to the country’s International Monetary Fund’s loan program after key candidates vowed to renegotiate terms after elections.

Meanwhile, India lent the Maldives enough funds for its upcoming Islamic bond payments, easing a default risk for the island nation in the near-term.

In Egypt, officials plans to return to international debt markets for the first time since late 2021, selling $3 billion of external debt in different tranches during the fiscal year through June, according to people familiar with the matter.

In equity markets, banking stocks in the Philippines rallied after the central bank said it will slash the reserve requirement ratio for larger banks, injecting about 250 billion pesos ($4.5 billion) into the economy.

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