Emerging market currencies strengthened

Валюты развивающихся стран

Emerging market currencies strengthened last week at the maximal pace since 2008. Since the beginning of the week index of emerging market currencies rose by 3.2%.

Russian ruble showed the biggest gains as it rose versus the US dollar by about 7%. Malaysian Ringgit and Indonesian Rupiah also showed significant growth as they gained by 6-8%. Emerging market currencies strengthened as investors’ expectations of the US Federal Reserve rate hike have weakened.

In the beginning of September, futures priced in 60% possibility of a rate hike by December, in October these odds decreased to 39%, and many investors refrained from investing in the US dollars. Lower bets for the US dollar provided support for emerging market currencies. 

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