Emerging market currencies weakened on Friday as investors prepared for a likely Federal Reserve hold on interest rates. The MSCI emerging market currency index slipped 0.4%, reflecting a broader pullback in risk-sensitive assets.

The move came as U.S. Treasury yields edged higher, making dollar-linked returns more attractive and reducing demand for higher-yielding assets in emerging economies. Traders also stayed cautious ahead of the Fed's policy decision, which could shape capital flows in the weeks ahead.

A stronger yield backdrop in the United States often puts pressure on developing-world currencies, especially when markets expect rates to stay elevated for longer. That dynamic can tighten financial conditions for countries that rely on foreign investment and external financing.

For now, investors appear to be waiting for clearer guidance from the central bank before taking on more exposure to emerging markets. Until then, currency markets are likely to remain sensitive to every shift in U.S. rate expectations and bond yields.