Emerging markets steadied off recent highs on Friday as a better-than-expected August reading of German business confidence helped offset lacklustre US economic data and concerns about Ireland's ability to grapple down its debt and deficit Israel's shekel touched a new five-month high against the dollar while Dubai is set to stage a capital-markets comeback with a $1 billion bond issue.
Overnight Asian gains helped steady emerging shares just below the new 26-month highs they reached on Thursday despite figures showing an uninspiring pace of economic recovery in the US.
Ahead of the release later in the day of US durable good orders for August, the higher-than-forecast reading of the Ifo German business climate index helped support sentiment.
"There was speculation the Ifo reading would be weaker but it turned out to be quite good. There is a growing conviction that European growth won't be as bad as earlier thought," said Cristian Maggio, emerging markets strategist at TD Securities.
"US durable goods numbers will be the next important piece of data for emerging markets," he added. By 1124 GMT, the benchmark emerging equity index was 0.3 percent higher though emerging European stocks were flat.
Czech stocks dipped 0.4 percent from Thursday's 12-month highs while Turkish equities slid 0.5 percent to continue their retreat from Wednesday's all-time highs.
Emerging currencies were mostly on a firmer footing, although Poland's zloty dipped 0.2 percent to its weakest level in three weeks versus the euro.
The currency has been under pressure this week after the government raised its forecast for this year's budget deficit.
Russia's rouble, which slipped to an eight-month low against its dollar-euro basket earlier in the week, continued to recover, aided by local-currency demand from exporters seeking to pay upcoming end-month taxes.
"A confluence of factors affected the rouble, but these should now be priced ... Russia has lagged in the recovery, but is now picking up speed in relative terms, when considering both the latest activity numbers and leading indicators," said Bank of America-Merrill Lynch in a client note, adding that the currency remained undervalued from a long-term perspective.
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