Faltering EM Currency Rally Strong in Asia

Of the nine developing-nation exchange-rates to strengthen in August, six were from Asia, with South Korea’s won and Malaysia’s ringgit leading the gains. A Bloomberg index of the 20 most-traded emerging-market currencies posted its first back-to-back monthly drop since January as geopolitical strife and the withdrawal of extraordinary monetary stimulus in the U.S. makes investors choosier about where they put their cash.

Asian countries are being favored because of their generally superior trade balances, particularly now that China’s economy is showing signs of stabilizing. South Korean and Indian bond markets attracted a combined $5 billion from international investors last month, while Turkey and South Africa saw outflows of $2 billion, data compiled by Bloomberg show.

“Asia stands out as an alternative safe haven, far away from geopolitical stress in Ukraine, Gaza and Iraq,” Anders Faergemann, a senior money manager in London at PineBridge Investments LLC, which oversees $71.4 billion, said by e-mail on Aug. 28. “The region is also benefiting from the apparent stabilization of China’s economic growth.”


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