Emerging market currencies and stocks experienced gains on Monday, driven by a weaker dollar and anticipation surrounding trade talks between the United States and China.
The MSCI index for emerging market currencies reached a record high, increasing by 0.2%. Simultaneously, a broad index for emerging market equities surged by approximately 1% to a three-year high.
Global markets are optimistic about the discussions between Washington and Beijing in London, hoping for improved trade relations.
The aim is to revive a preliminary agreement struck last month in Geneva that briefly relieved investors after months of uncertainty due to U.S. President Donald Trump's tariff orders since his return to the White House in January.
The trade curbs have affected China's export growth, which slowed to a three-month low in May, while its factory-gate deflation deepened to its worst level in two years.
The dollar index, which measures its performance against other major currencies, slipped following temporary relief after an upbeat U.S. employment report on Friday.
In Central and Eastern Europe, the Czech Republic's main stock index was little changed after rising last week.
The Czech crown eased 0.1%, with data showing an expected drop in the Czech unemployment rate in May.
In Poland, the zloty edged up 0.2% after sharp losses last week following the presidential victory for conservative Karol Nawrocki that fuelled concerns about the country's fiscal health.
Investors are focussed on a vote of confidence in the Polish parliament on Wednesday, which could dictate market moves for the rest of the week.
Poland's main stock market index, the WIG, was down 0.2%. The index sank 2.6% last week.
Meanwhile, Fitch affirmed Hungary's credit rating at "BBB" on Friday, citing strong structural indicators compared to peers under the same ratings grade, but flagged its higher public debt, unusual economic policies, and the economy's high trade dependence.