Emerging Markets Get Reprieve But Still Falling as US Data Positive

Emerging market stocks snapped a six-day losing streak on Friday though it made little impact on a fourth straight week of falls as the soaring dollar also kept the pressure on developing economy currencies.

MSCI’s emerging equities index was up 0.4 percent as the week’s sell-off in global stocks abated ahead of U.S. jobs data. But that did little to dent its 3 percent slide since Monday and 10 percent plunge since early September.

“Everything we are seeing now in emerging markets is very much driven by global monetary policy,” said Danske Bank analyst Lars Christensen. “Overall it’s hard to see this stopping before we see a stabilisation and a stop to this dollar strengthening,”

Russia’s remained in the spotlight as stocks headed for another weekly fall and the rouble weakened to 44.48 against a dollar-euro basket, close to the 44.40 level where the central bank automatically starts unlimited interventions.

The rouble has been under heavy selling pressure for months due to the Ukraine crisis and strong demand for dollars from Russian firms shut out of international capital markets, while falling oil prices are the latest strain.

The currency first breached the 44.40 level on Oct. 1, prompting the central bank’s first market interventions since May.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza