Emerging-Market Currencies Decline Amid Fed Bets as Lira Tumbles

27 Jan 2017, 03:20 AM IST

(Bloomberg) -- Emerging-market currencies and stocks dropped after better-than-estimated U.S. economic data bolstered the case for the Federal Reserve to raise interest rates, dimming the allure of riskier assets. Turkey’s lira sank.

Emerging-Market Currencies Decline Amid Fed Bets as Lira Tumbles

Traders pushed down the value of assets in developing nations after the yield on 10-year Treasury notes climbed to the highest level this year as data showed a jump in housing starts and a drop in jobless claims.

“The higher 10-year U.S. Treasury yield is not supportive for emerging-market currencies," said Georgette Boele, a currency and commodity strategist at ABN Amro NV in Amsterdam.

Currencies

The MSCI Emerging Markets Currency Index fell 0.5 percent at 4 p.m. in New York.
Fifteen out of 24 developing-nation currencies tracked by Bloomberg declined.
Turkey’s lira extended this year’s plunge to 8 percent; UniCredit says policy remains too loose.
The South Korean won fell 0.9 percent after a board member of the central bank said it may cut interest rates that are already at a record low.
Peru’s sol gained 0.7 percent to its highest level in five months.

Stocks

The MSCI Emerging Markets Index retreated 0.4 percent, halting a two-day advance.
Egypt’s EGX 30 Index dropped the most since June after the government said it would delay the start of a capital-gains tax on stocks.
Brazil’s Ibovespa fell 0.3 percent, led by miner Vale SA.
Kuwait’s SE Price Index advanced for a 12th day, bringing its gains this year to 12 percent, the most among more than 90 gauges tracked by Bloomberg.

Emerging-Market Currencies Decline Amid Fed Bets as Lira Tumbles