Volatile emerging market currencies won't dissipate for next six months: report
October 6, 2020
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Volatility in emerging market currencies will not let up in the next six months as U.S. presidential election jitters mount and domestic economic growth tapers off, a Reuters poll of market strategists showed.
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Most emerging market currencies were forecast to weaken or at best cling to a range over the next three to six months but will rise about 2% on average in a year, supported by a weaker dollar, the Sept. 28-Oct. 5 poll found.
Reuters surveys since the global shutdown in activity in March have been consistently concluding emerging market currencies will not recoup even half their coronavirus-induced 2020 losses within a year.
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Still, a steep dollar selloff, which just posted its worst quarter in three years as expectations for a swift recovery from the COVID-19 recession made investors exit safe havens, has helped currencies in less developed countries rise. That comes despite deep economic troubles from the pandemic.