Emerging currencies soar as US rate hike talk fades

0

TOKYO: Emerging market currencies jumped against the dollar on Monday as weak US growth data torpedoed speculation of an interest rate hike this year.

Advertisements

Friday’s report showing the world’s top economy expanded 1.2 percent in the April-June quarter poured cold water on expectations the US central bank will raise rates before year’s end.

Analysts had expected growth closer to 2.6 percent.

“The GDP was a massive miss, so I’m not surprised by the huge dollar selloff that ensued,”
Thomas Averill, a Sydney-based managing director at Rochford Capital, a currency and rates risk-management company, told Bloomberg News.

“The immediate risk at the moment is for a bit of further weakness in the US dollar on the moderated monetary tightening view.”

The greenback took a hammering on Friday in response to the below-par US growth figures and extended its losses Monday.

The oil-reliant Malaysian ringgit jumped 0.8 percent, with extra support coming from a pick-up in crude prices, while the South Korean won also was 0.8 percent higher.

Taiwan’s dollar was up 0.6 percent and the Indonesian rupiah rose 0.5 percent, while the Thai baht and Philippine peso also booked solid gains.

However, the greenback rose to 102.61 yen from 102.07 yen in New York, although it is still down sharply from 103.58 yen in Tokyo earlier Friday before the US data release.

The euro ticked up to $1.1180 and 114.47 yen from $1.1177 and 114.09 yen in US trade.

Traders are now awaiting the release of details of a 28 trillion yen fiscal stimulus program unveiled by Japan’s government last week, with Prime Minister Shinzo Abe tipped to make a statement on Tuesday.

AFP

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.