LONDON (Feb 20): Turkey's lira hit the strongest level in more than six weeks against the US dollar and Mongolian bonds soared after a US$5.5 billion IMF-led bailout for the country, outperforming broader emerging markets.

MSCI's emerging index rose 0.2%, but struggled to get close to 1½-year highs hit last week after Friday's 0.7% fall.

Meanwhile, stronger commodity prices and investors seeking higher rewards lifted some currencies as investors prepared for speeches by US Federal Reserve policymakers that could provide further clues on the future path of interest rates.

Speculation the Fed could hike as soon as March has generally underpinned the US dollar and pressured some emerging currencies, though Monday trading was muted with US markets closed for Presidents Day.

Turkey's lira strengthened 0.3% in its second day of gains, shrugging off data showing consumer confidence declining in February, though the gains later faded.

"Two things are supporting emerging market currencies: One is the yield and the other is volatility, and — as long as volatility remains low and yields remain high — the carry trade continues and this attracts flows into lira, rouble and other high yielders," said Cristian Maggio at TD Securities.

Higher oil prices and ratings agency Moody's updating its outlook on Moscow's sovereign rating to 'stable' from 'negative' propelled Russia's rouble 0.6% higher against the US dollar.

"It signals that the acute phase of the Russian crisis is over and none of the agencies expect further deterioration on the macro and creditworthiness front," Maggio added.

But South Africa's rand slipped 0.6% to its weakest level in nearly a week, with investors nervous before Finance Minister Pravin Gordhan's budget speech on Wednesday amid renewed talk of a cabinet reshuffle.

Gordhan may target taxes on income, alcohol and tobacco in the budget to reassure rating agencies that he will gradually rein in the deficit, a Reuters poll found.

Asian currencies were mostly weaker, with the Philippine peso hitting its lowest in more than a decade after crashing through the psychologically key 50-per-dollar level

Thailand's baht also slipped after data showed the economy expanded less than expected in the last quarter of 2016, indicating recovery will remain slow.

Meanwhile, Mongolian dollar bonds rose across the curve after the country staved off default risk, clinching a US$5.5 billion loan package with the International Monetary Fund, the World Bank, Beijing and other lenders.

Across emerging Europe, Serbia's dinar firmed 0.15% after Prime Minister Aleksandar Vucic agreed to be the presidential candidate of his centre-right Serbian Progressive Party (SNS) in an election tentatively slated for April.

A victory for Vucic could mean a quicker move to EU accession by the Balkan country.