Central Banks Helping Emerging-Market Currencies

Emerging-market currencies including South Africa’s rand and the Turkish lira rose a fourth day on improving growth reports as global central banks keep the economy awash in cheap money.

New Zealand’s dollar dropped after the central bank said it would pause interest-rate increases after raising its official cash rate to 3.5 percent, from 3.25 percent. Australia’s dollar climbed to the highest level in almost two weeks against its U.S. peer as traders pared bets on a cut in interest rates after a jump in inflation. Indonesia’s rupiah jumped the most in two weeks after Joko Widodo was named the nation’s next president. The euro was little changed against the greenback and yen.

Emerging-market currencies “will do well at a time when the data is good but policy makers are highlighting that they’re going to take it slowly,” said Phyllis Papadavid, a senior global-currency strategist at BNP Paribas SA’s corporate and investment-banking unit in London. “We would expect that the dollar would stay resilient and outperform against the yen and the euro on the basis of the better U.S. data we’re seeing.”


Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.