The yen weakened from its strongest level in more than two months against the dollar as a rally in emerging-market currencies damped demand for haven assets.
The U.S. currency declined against the Turkish lira and South African rand amid speculation that the rout in emerging markets during the past two weeks was overdone as stocks rallied and Treasuries declined. Australia’s dollar rose the most since June versus the greenback after the nation’s central bank dropped its reference to the currency being too strong. The euro fell against most of its 16 major peers amid speculation the European Central Bank may take measures to stimulate the economy that tend to debase the currency.
“You’ve had a pattern of increased risk aversion, but that came off today and hurt the yen,” Charles St-Arnaud, a foreign-exchange strategist at Nomura Holdings Inc., said in a phone interview. “At some point, people were going to be willing to get long emerging markets again.” A long position is a bet an asset will rise in value.
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