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Emerging Currencies Can Weather the Coming Rate-Rise Storm

  • Impact of QE unwinding may be less severe than in 2013: Amundi
  • Shrinking deficits, high reserves, low inflation offer cushion
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Bonds Are Facing Turmoil

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As global bonds reel under hawkish rhetoric by major central bankers, AllianceBernstein and Amundi Asset Management say emerging-market currencies will weather the storm better than 2013.

Improvements in external balances, higher reserves and subdued inflation are among factors making developing-nation economies from India to Mexico appear less vulnerable to the risk of outflows when their advanced peers begin to taper, they say. Recent stability in exchange rates and a gauge of price swings near a three-year low are signs of their resilience.