The Turkish lira recovered from near its all-time lows on Monday, as the country lifted some Covid-19 restrictions, while gains in most other emerging market assets were capped by concerns over the increase in virus cases in Asia and disappointing Chinese data.

The lira rose about 1.4% to 8.3256, leading to gains in Europe, the Middle East and Africa (EMEA), after the government said it would allow moves during the day after a strict lockdown imposed nearly three weeks ago.

The currency was set for its best day since early April, after recovering from levels close to an all-time low of 8.5789. Concerns over dwindling foreign exchange reserves, central bank credibility and general risk aversion had hit the lira hard in recent weeks.

Turkish stocks rose 0.6%, with most other exchanges in the EMEA region posting small gains.

Leading the losses among EMEA currencies, the South African rand fell 0.5%, while the Russian ruble fell 0.1% ahead of preliminary first-quarter GDP data due later in the day.

Chilean stocks and the peso were expected to open lower, after the country’s center-right ruling coalition suffered a shock loss as voters backed independents for the body that will draft the new constitution of the country.

“An ‘independent’ constitutional convention suggests a regime of heightened uncertainty ahead,” analysts at JP Morgan wrote in a note.

The Hungarian forint jumped 0.7% to a nearly nine-month high against the euro, after the country’s deputy central bank governor Barnabas Virag signaled the possibility of a hike interest rates in June to fight rising inflation.

General sentiment was dampened after the surge in Covid-19 cases in Taiwan, Singapore and Japan that raised fears of strict restrictions on activity, which would hamper the pace of the nascent economic recovery. Taiwanese stocks plunged nearly 3 percent.

Chinese retail sales largely missed expectations for April, as data shows factories in the country slowed growth during the month, indicating a patchy recovery in the world’s second-largest economy.

“It is still early days, and the impact on the region’s economies will largely depend on the success of the measures currently being deployed. (If) succeed … governments can remove restrictions sooner, allowing economic recovery to return, ”ING analysts wrote in a note.

Emerging markets in Asia have far outpaced their peers this year so far, supported by a more effective fight against the pandemic. – Reuters