The rand and Russia's rouble led gains across currencies in Europe, the Middle East and Africa (EMEA) on Tuesday.

The rand rose 0.5%, as the country looked to start a vaccination campaign with Johnson & Johnson's Covid-19 vaccine after data showed AstraZeneca's shot offered minimal protection against mild-to-moderate illness from the dominant local virus variant.

Most emerging market currencies strengthened and stocks neared record highs as investors weighed the effects of a prospective R28,10 tln ($1.9 tln) U.S. stimulus package on bond yields and the dollar.

But gains were limited, as the prospect of higher U.S. fiscal spending could push up treasury yields and drive money away from emerging market debt and currencies.

The dollar retreated as investors showed more doubts about the pace of an economic recovery in the United States.

"The globally low interest rate environment supports EM currencies. Rising inflation expectations in the U.S. and rising U.S. yields on the other hand are negative," You-Na Park-Heger, foreign exchange and emerging market analyst at Commerzbank wrote.

"There is not just uncertainty as to whether the package entails risks of overheating but also as to how the Fed would react ... whereas high inflation puts pressure on the dollar the Fed’s proactive measures would support the dollar."

Emerging market stocks, which stand to benefit the most from increased global liquidity, rose 0.3% and were trading just below a record high. Most EMEA stocks also gained.

Stocks have by far gained the most from a risk-driven rally this year, even outperforming their developed world peers on expectations that steady vaccination campaigns and stimulus will enable a strong economic recovery this year.

The rouble was set to rise for a fifth consecutive day, hitting an more than two-week high on a spike in oil prices. Investors were also pricing in a possible interest rate hike by the central bank this Friday.

Reuters reported that Russian authorities were considering a new social spending package worth at least $6.7 billion to address discontent over falling living standards before an autumn election.

But concerns about political unrest in the country, caused by the jailing of a prominent Kremlin critic, kept gains in the rouble subdued. Russian stocks fell slightly.

Turkey's lira dropped 0.8% from a six-month high as investors paused a recent buying streak.

The Turkish central bank has vowed to keep monetary policy tight until inflation is contained, but its measures to rebuild depleted foreign exchange reserves will be a point of focus.

Turkish stocks rose 0.8%. 

Most central European currencies dropped against the euro, but rose slightly to the dollar.