Most emerging market currencies set to hold on to gains: Reuters poll

Written by Devayani Satian and Woewi Nadab

Bangallow/Johannesburg (Reuters) – Most of the emerging market currencies will maintain the gains this year or extend it for a dollar in the next six months, as the exceptional traders in the United States that fed the Greenback round, and found a poll by Reuters about the FX strategy.

At the beginning of the year, the emerging currencies on the market seemed to be on a rough journey on the expectations of the American economic power and the delay in interest in the field of federal reserves as well as commercial tensions.

However, they have challenged expectations since then, as the broader customs tariff for US President Donald Trump has sparked the wrongly implemented tariff with deteriorating financial expectations a trip of American assets and American assets.

This is expected to continue, as more than half of the currencies included in the survey expect to circulate in narrow ranges or gains, while the rest was expected to restore only a small part of the strong gains for this year, according to a survey from May 30 to 4 June for more than 50 strategies for foreign work coin.

“The less resistance path is a somewhat weaker dollar at the present time,” said Christopher Turner, head of FX strategy in Eng.

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Separately, the dollar has become a favorite financing currency as Trump’s commercial war feeds fear and external flows of American assets.

Em Carry Trade has attracted borrowing in currencies with a low return for investment in those revenue with a higher return – investors chasing returns.

The high return like Rand South Africa and the Brazilian increased about 6.0 % and 10.0 %, respectively, this year. Real was expected to lose only about 2.0 %, while Rand is likely to circulate in a narrow range during the next six months.

“I think the trend of the emerging currency that exceeds performance in the emerging market can continue in the second half of this year, but there are negative risks of penetration from it,” said Lee Hardman, an MUFG economist, referring to the disruption of trade and potential hitting of global growth.

The Turkish lira, the weakest of the emerging market so far, will give up this year, by another 8.0 % from $ 39 to $ 42.8 over the next six months.

In Asia, the Chinese yuan is expected to remain highly managed despite the extensive fears about the weak demand in its economy, and a confrontation with Washington on the policy of customs tariffs and export controls.