Most Emerging Currencies Bruised by Yellen as Rates Seen Rising
- Currency gauge set for biggest monthly drop since August
- Credit Agricole says Fed will be less supportive of EMs
Most Emerging-market currencies fell, extending their worst monthly decline since August, as mounting signs the Federal Reserve will raise interest rates in June or July diminished the allure of higher-yielding assets.
Asian currencies led the retreat after Fed Chair Janet Yellen said the strengthening U.S. economy would probably warrant an increase in borrowing costs “in the coming months.” The rand depreciated for a second day and China weakened the yuan fixing as the Bloomberg Dollar Spot Index extended its biggest monthly advance since September 2014. Bucking the trend, Brazil’s real rose after a higher than expected primary surplus in April and the ruble strengthened as crude advanced in New York. The closure of U.K. and U.S. markets for holidays diminished trading volumes.