UniCredit Sees Staying Power in Emerging-Market Currencies Rally
23 February 2016, 08:43
0
63
By Maria Levitov
(Bloomberg) -- Currencies of emerging markets, particularly
those of commodity exporters, are poised to rebound further,
according to UniCredit Bank AG.
South Africa’s rand will extend gains of 8 percent against
the dollar in the past month, the strongest performance among
developing-nation currencies, according to the strategists.
Russia’s ruble, which has advanced more than 13 percent since
touching a record low on Jan. 21, should also “do well,”
UniCredit said.
“The emerging-market currencies risk-sentiment tide is
turning,” UniCredit’s London-based strategists Kiran Kowshik and
Vasileios Gkionakis wrote in an e-mailed report today. “This may
have legs to run on.”
The rally will probably last in the weeks ahead amid signs
commodity prices are stabilizing led by metals. Stagnating
global growth means the Federal Reserve will hesitate before it
raises interest rates again, according to the report. In the
past month, 19 of 24 emerging-market currencies have
strengthened against the dollar, including gains of more than 3
percent for the ruble and Brazil’s real.
UniCredit also pointed to risks, saying a deeper
devaluation of the yuan or a further selloff in equities would
temper appetite.
The strategists recommend betting on the rand versus the
Turkish lira, as well as the lower-yielding dollar, euro and
Japanese yen, according to the note published Monday.
To contact the reporter on this story:
Maria Levitov in London at mlevitov@bloomberg.net
To contact the editors responsible for this story:
Daliah Merzaban at dmerzaban@bloomberg.net
Cecile Gutscher
