Nov. 24 (Reuters) – The surging dollar put pressure on emerging market currencies on Wednesday, with the Mexican peso slipping to its lowest level in more than eight months amid central bank uncertainty, while the pound Turkey appreciated 6%, reversing about half of the decline from the previous session.

As a grim reading of German business morale sent the euro to its lowest level in more than 16 months, the dollar resumed its rally, bolstered by data showing that weekly jobless claims in the United States have hit their lowest level in 52 years. Read more

The lira recovered to 12.1 per dollar after hitting a record low of 13.45 on Tuesday amid fears of lingering political drift as President Tayyip Erdogan presses the central bank to cut its rates despite soaring inflation.

“We are likely to continue to see downward pressure on the lira before the end of the year,” said Christian Lawrence, senior currency and rates strategist at Rabobank. “It won’t be at the rate we’ve seen over the past few days,” he said, attributing the day’s moves to profit taking.

Lawrence does not see Turkish interest rates falling further as the central bank has signaled and expects rates to be maintained or “where appropriate, raised”.

The Mexican peso fell 2% to 21.60 per dollar after President Andres Manuel Lopez Obrador withdrew his nomination for Arturo Herrera as head of the central bank next year and said he would nominate Victoria Rodriguez , senior official of the Ministry of Finance. Read more

The fact that Rodriguez has worked in the public sector before should improve market perception, said Wilson Ferrarezi, Brazilian economist at TS Lombard. But his position remains to be seen as the president has been seen appointing someone with a more accommodating bias, and the sudden change adds to the volatility, he said.

Mexican annual inflation accelerated faster than expected during the first half of November to over 7%, the highest rate in more than 20 years, increasing pressure on the central bank to tighten costs further loan.

“Inflation peaked two decades earlier this month but, with the recovery showing further signs of weakness, we believe the central bank tightening cycle will remain gradual,” said economists at Capital Economics. .

Falling oil prices also weighed on the peso, as did the Colombian exporter’s currency, which slipped 0.8% to its lowest level in more than three months.

Higher copper prices cushioned declines in the Chilean peso which fell 0.1%, posting the smallest declines among its peers.

The Brazilian consumer confidence index, which hit its lowest level in seven months in November, prevented the real from making any significant gains.

Emerging market equities (.MSCIEF) gave meager gains to slide for a sixth consecutive session, down 0.3%. Russian stocks (.IMOEX) erased initial gains to trade down 0.3%, while Brazil’s Bovespa Index (.BVSP) was led lower by consumer stocks.

Latin American Stock Indices and Currencies at 1901 GMT:

Reporting by Susan Mathew and Shreyashi Sanyal; in Bangalore; Editing by Kirsten Donovan and Grant McCool

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