Emerging Markets Assets Gain as Traders Bet on Fed Rate Cuts

Currencies and stocks in developing economies advanced Monday as sentiment for risk assets rebounded on speculation that the Federal Reserve will resume cutting interest rates.

MSCI’s index for developing currencies rose 0.4%, notching the biggest daily gain in over a month, while a similar measure for stocks strengthened 0.9%. Investors are betting that the Fed may lower interest rates as soon as next month, with an upcoming change in its board and the firing of the US government’s chief labor statistician adding to downside risks for the dollar.