JOHANNESBURG/BENGALURU : China's reopening is set to boost emerging market currencies against the U.S. dollar over the next six months, primarily for those that export commodities to the world's second-largest economy, a Reuters poll of foreign exchange analysts found.Investor confidence towards emerging
JOHANNESBURG/BENGALURU : China's reopening is set to boost emerging market currencies against the U.S. dollar over the next six months, primarily for those that export commodities to the world's second-largest economy, a Reuters poll of foreign exchange analysts found.
But China's reopening is expected to stimulate domestic consumption and tourism, which would benefit its neighbours in North and Southeast Asia, as well as various emerging economies that rely on commodity exports. "Hard landing risks remain with us, but timing it is tricky as global growth has been surprising to the upside. In this environment, it is better to avoid direct USD exposure."
"USD strength can persist for a bit longer, as the market tries to navigate the balance of global growth recovery and higher rates," wrote Mark McCormick, global head of FX strategy at TD Securities." we continue to see few catalysts in the very near-term that could turn the narrative, though keep an eye on the upcoming China data dump."
But analysts said the direction of the yuan will partly depend on the annual meeting of the National Party Congress, slated to begin this Sunday. Investors are watching for any further government measures to stimulate economic recovery. South Africa's rand, a high-yielder, which has lost over 6 per cent so far this year, was expected to gain about 3 per cent in the next six months to 17.67 per dollar.
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