* Indian stocks gain on hope of stimulus
* China’s yuan drops to 11-year low
* All eyes on Powell speech at 1400 GMT
By Sruthi Shankar
Aug 23 (Reuters) - Most emerging-market currencies remained under pressure on Friday and China’s yuan dropped to an 11-year low amid doubts U.S. Federal Reserve chair Jerome Powell will signal a prolonged series of interest rate cuts in a speech later.
South Africa’s rand was an exception, gaining 0.6% after the National Treasury promised to cut costs and keep spending down. Most other currencies were little changed.
The MSCI’s index of developing-world currencies is on track for a fifth straight week of losses, amid worries about an escalation in U.S.-China trade war, U.S. bonds markets warning a recession is on the horizon and a slump in Argentina’s markets.
China’s yuan fell for a seventh straight session, even though the central bank fixed its official midpoint at a stronger rate than markets expected.
The United States and China show little sign of resolving their trade conflict, taking a toll on global growth. Investors are betting that policymakers will turn to stimulus measures.
However, minutes from the Fed’s July meeting on Wednesday showed policymakers were reluctant to make aggressive rate cuts, leaving traders to stick to bets of a quarter-basis-point rate cut in September. All eyes will turn to Powell’s keynote speech at the Jackson Hole symposium at 1400 GMT.
“It is likely Powell will endorse expectations for further cuts going forward (and stress the end of [quantitative tightening] is behind us already),” RBC’s chief currency strategist, Adam Cole, wrote in a note.
“But with markets already so aggressively priced, it would take a complete about-turn from Powell to push rate expectations lower still, and we think the balance of risks is USD-positive.”
Gains for most Asian stock markets pulled the MSCI’s EM stock index up 0.3%, on course for its first week of gain in five.
Chinese stocks posted their best weekly performance in two months after White House economic adviser Larry Kudlow said on Thursday Washington was planning another round of talks with Beijing next month.
Indian stocks gained on hopes of stimulus measures aimed at reviving growth. Finance Minister Nirmala Sitharaman is set to hold a press conference later in the day, amid reports the government may roll back higher taxes for foreign portfolio investors.
S&P Global is set to review Lebanon’s sovereign credit rating later in the day. Markets are pricing in a risk of downgrade, as worries mount about the country’s finances.
S&P put the country’s B- rating on a negative outlook at the start of March. Lebanon carries one of the world’s heaviest public debt burdens, at 150% of gross domestic product, after years of slow economic growth.
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For RUSSIAN market report, see (Reporting by Sruthi Shankar in Bengaluru, editing by Larry King)