Underachieving Currencies Key Threat to Fragile EM Rebound
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As stocks and bonds in developing nations recover from the pandemic-fueled sell-off, currencies are trapped in a bout of underperformance.
The MSCI Emerging Markets Currency Index added less than 0.7% in April, while MSCI’s equities gauge posted the best monthly rally in four years and local-currency bonds had their biggest decline in yields since 2015. Now, the currency measure is showing technical patterns suggesting a second leg of weakness.