Emerging market currencies fade at week’s end

Sterling strengthened over the week, helped by the release Wednesday of the minutes from this month’s Monetary Policy Committee meeting. The minutes revealed that all nine MPC members voted for May’s rate hike and that they considered raising the rate by 50 basis points instead of by the 25 bp that they did raise them.

During the week, sterling added 0.6 percent versus the US dollar, to $1.9860, while it gained 0.9 percent to £0.6780 in relation to the euro. The pound was 1 percent higher against the yen, to ¥241.40.

The Japanese currency dropped to a record low versus the euro early in the week as rising equities markets encouraged carry trades and the selling of yen to finance them. But after Alan Greenspan, the former chairman of the Federal Reserve, expressed concerns over China’s equities markets, investors fled from risk and began buying the yen again. Still, the yen ended the week about even against the euro, at ¥163.60, and it was 0.3 percent weaker against the greenback to ¥121.50.

Emerging market currencies rose in relation to the US dollar at the beginning of the week but declined later on. The most affected were the Turkish lira, which ended the week 0.6 percent lower against the dollar to TL1.3295, and the South African rand, down 1.5 percent on the week to $7.0830 to the dollar.

Story link: Emerging market currencies fade at week’s end