The rand weakened the most across emerging market currencies on Tuesday as investors stayed on sidelines on uncertainty over a R30,39 trn ($1.9 trn) U.S. stimulus plan, while the Turkish lira was supported by positive IMF economic forecast.

The rand weakened about 0.6%, extending losses to a fourth straight session as tepid risk appetite was exacerbated by concerns over the country's fiscal health and on new variants of the coronavirus discovered in the country.

Turkey's lira fared better than most of its peers in Europe, the Middle East and Africa (EMEA), trading 0.2% higher to the dollar after the International Monetary Fund (IMF) said it expects the country's economy to grow by 6% in 2021, higher than a previous projection.

Near-term sentiment in emerging markets was dented by uncertainty over a $1.9 trillion U.S. stimulus package, while surging Covid-19 cases across the globe drove currency traders into the dollar.

"Vaccination programmes are making much slower progress in a number of countries than had previously been planned. Moreover, it is uncertain to what extent vaccinations are also effective against new mutations of the virus," Antje Praefcke, FX and EM analyst at Commerzbank wrote in a note.

"The market's initial reaction seemed to return to the old pattern in view of this new wave of uncertainties: risk-off and into USD despite falling U.S. yields."

Most emerging market currencies are now trading in a flat-to-negative range so far this year, as developments in the pandemic offset initial optimism over steady economic recovery in 2021.

Latin American units are by far the worst performers this year, while Asian currencies have held their ground.

Emerging market stocks also retreated from recent gains, with the MSCI's index of stocks tumbling 1.7% from a record high.

SA stocks fell 1% from a record high, while Turkish stocks fell 0.9%.

Russia's rouble fell 0.3%, extending losses to a fourth straight session as concerns over new western sanctions weighed on local risk assets. Russian stocks also retreated.

Central European currencies weakened against the euro, while stocks also retreated.