Emerging-Market Traders Defy August Risks to Bet on Strength
- Fidelity International is optimistic on developing currencies
- Colombia forecast to cut rates; Ghana, Kenya may be on hold
The Chilean peso has led a rally in currencies.
Photographer: Morten Anderson/Bloomberg
If emerging markets can get through the final week of the month without too many hiccups, some investors might consider July to be a platform for recovery.
The benchmark MSCI stock index has risen more than 7% this month, underpinned by gains in Brazil, China and India, while the Hungarian forint and Chilean peso have led a rally in currencies. Brazil and South Africa have just helped drive the Bloomberg Barclays index of domestic bonds to a fifth week of gains, their longest-winning streak since January, while dollar bonds have clocked up a 13th positive week, the best result since 2011. Investors added money to emerging-market exchange-traded funds for a third week, with more than half of the inflows going to China-dedicated ETFs, the longest streak since January.