Asian currencies are set to drop for a third week, the longest run of losses since January, as the prospect of higher U.S. interest rates dims the appeal of emerging-market assets.
Indonesia’s rupiah and Malaysia’s ringgit led the declines after the Federal Reserve on Sept. 17 raised by 25 basis points its median estimate for where the federal funds rate will be by the end of 2015, while pledging to keep it near zero for a “considerable time.” Global funds pulled a combined $906.1 million this week from stocks in Indonesia, South Korea, Taiwan, India and the Philippines. Counting began across Scotland following a referendum on its independence from the U.K.
“The key concern is capital outflows from Asia to the U.S.,” said Ho Woei Chen, an economist at United Overseas Bank Ltd. in Singapore. “The U.S. could raise interest rates at a faster pace than expected.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD: Federal Reserve and Nonfarm Payrolls spell action this week
The EUR/USD pair temporarily reconquered the 1.0700 threshold last week, settling at around that round level. The US Dollar lost its appeal following discouraging United States macroeconomic data indicating tepid growth and persistent inflationary pressures.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold: Strength of $2,300 support is an encouraging sign for bulls
Gold price started last week under heavy bearish pressure and registered its largest one-day loss of the year on Monday. The pair managed to stage a rebound in the second half of the week but closed in negative territory.
Ethereum fees drops to lowest level since October, ETH sustains above $3,200
Ethereum’s high transaction fees has been a sticky issue for the blockchain in the past. This led to Layer 2 chains and scaling solutions developing alternatives for users looking to transact at a lower cost.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.