EM Currencies Edge Lower as Fed Signals Concern Over US Outlook

An index of emerging-market currencies ended the day slightly lower after the Federal Reserve decided to keep interest rates unchanged and showed concerns over the US economic outlook and policy uncertainty.

The Federal Open Market Committee voted on Wednesday to keep the benchmark federal funds rate in a range of 4.25%-4.5%, in line with investors expectations. However, uncertainty has been increasing about the rest of the year, with traders pricing in about two quarter-point rate reductions by the end of 2025 as of Tuesday’s close, down from about three a week ago.