Emerging-Market Stock Swings Widen as Exchange Rates Fluctuate
- Brazil's real surges most in seven years from record low
- Yellen says U.S. rate increase probably appropriate this year
Emerging-market equities fell amid the widest price swings in four years and exchange rates fluctuated as traders weighed the potential timing of an increase in U.S. interest rates against signs of faltering global economic growth.
The Federal Reserve cited concern that the world economy is weakening when it kept U.S. borrowing costs unchanged last week. Meanwhile, a surprise decline in Chinese manufacturing has added to uncertainty about when policy makers will start raising interest rates for the first time since 2006, a move that is expected to divert funds from riskier assets in developing nations as the dollar strengthens. Fed Chair Janet Yellen said in a speech after trading closed that policy makers are on track for an increase this year, while acknowledging that economic “surprises” could lead them to change that plan.