May 08, 2024 (MENAFN via COMTEX) --
(MENAFN) The surge in emerging market currencies persists as traders increasingly anticipate interest rate cuts from the US Federal Reserve, driving demand for these riskier assets. The benchmark index for currencies in developing countries marked a 0.3 percent rise on Monday, extending its gains over the past four days to 0.8 percent. Notably, the Chilean peso and the South African rand emerged as frontrunners in this ascent, with the Chilean currency reaching its highest level in over three months.
Simultaneously, the primary index for emerging market stocks continued its upward trajectory for the third consecutive day, posting a 0.6 percent increase to reach its highest level in nearly two years. Leading this climb were shares from key emerging economies such as India, China, and Saudi Arabia, reflecting investor confidence in the growth potential of these markets.
As emerging stock and currency markets brace for Treasury bond redemption auctions and forthcoming statements from Federal Reserve officials, market focus is expected to remain on these influential factors in the weeks ahead. The anticipation surrounding potential policy shifts from the Federal Reserve continues to shape investor sentiment, driving interest towards emerging market assets as viable investment options.
In a related development, the Israeli shekel experienced a notable 1 percent decline against the dollar, marking its most significant downturn in nearly three weeks. This decline followed the Israeli army's call for civilians to evacuate parts of Rafah, signaling preparations for a potential long-anticipated attack on Gaza City. The geopolitical tensions in the region have introduced a degree of uncertainty, influencing currency movements in the Israeli market.
Conversely, markets in three of the largest emerging economies received a positive boost following Turkey's sovereign rating upgrade and heightened expectations for economic prospects in Egypt and Nigeria. These developments have further underscored the resilience and attractiveness of emerging market assets amidst shifting global economic dynamics.â??
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