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FX.co ★ Currencies of emerging markets are on rise

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Forex Humor:::2024-08-20T07:36:19

Currencies of emerging markets are on rise

Great news came from the emerging markets. According to Bloomberg, currencies from these regions have hit their highest levels in two years. Emerging market currencies are on a strong upward trend, thanks to the weakening US dollar and the recovery of global stock markets.

On August 9, the MSCI EM currency index went up by 0.4%, reaching 1,742.8 points, its highest level since April 2022. The South Korean won took the lead among Asian currencies, appreciating by more than 1%.

This is bad news for the US dollar, which took a noticeable hit. Market hopes that the Federal Reserve will cut interest rates in the coming months are putting pressure on the greenback. In response, central banks in emerging markets are taking steps to protect their currencies. For instance, Asian countries, from India to Indonesia, have intervened this year to support their currencies.

Mizuho Bank Ltd. analysts believe that the changing expectations regarding a potential Fed rate cut have a positive effect on the performance of Asian emerging market currencies.

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