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Currencies Rise, Dollar Eases on Possible Biden-Putin Summit

Feb 21 (Reuters) - Emerging market currencies firmed as the dollar eased on Monday on prospects of a summit between the U.S. and Russian leaders, a possibility that has lifted hopes for a diplomatic solution to one of the most dangerous European crises in decades.

Russia's rouble rose 0.7% after ending the week flat, while the dollar index fell 0.3% on improving risk appetite. The broader MSCI's emerging markets currency index gained 0.1%.

U.S. President Joe Biden and Russian President Vladimir Putin have agreed in principle to a summit over Ukraine, French President Emmanuel Macron said. Still, satellite imagery appeared to show Russian deployments closer to Ukraine's border, while sounds of fighting were heard on Monday in the east, where Ukrainian government forces are fighting pro-Russian separatists. 

Growing strains between Russia and Ukraine have kept market participants on edge, dominating asset price action for more than a week now.

"The move into positive territory only came about due to an agreement in principle for U.S. President Biden, and Russian President Vladimir Putin to meet to avert a further slide into hostilities," Michael Hewson, chief market analyst at CMC Markets UK wrote in a client note.

South Africa's rand struggled for direction after paring early gains, taking cues from easing gold prices. Local investors also awaited the 2022 budget, which is slated to be presented to lawmakers by Finance Minister Enoch Godongwana on Wednesday.

The Turkish lira edged 0.1% higher, while stocks in the region added 1.3%. Data showed the number of foreign visitors arriving in Turkey jumped 151% from a year earlier to 1.28 million in January as the sector continued to recover pandemic-induced slump since 2020. 

The U.S. stock market was shut on Monday account of a public holiday.

Reporting by Shreyashi Sanyal in Bengaluru, Editing by William Maclean

Source: Reuters

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