WASHINGTON: Emerging-market currencies hit by a hawkish Federal Reserve (Fed) could soon regain their record run against the dollar on expectations that developing central banks may outpace their US counterpart in policy tightening.
The currencies of Brazil, Russia, the Czech Republic, South Africa and Hungary – countries that delivered multiple rate hikes or are expected to do so soon - are retaining quarterly gains and outperforming peers. More may join their ranks, with tightening expectations growing for countries including Chile and South Africa as economic activity and inflation roar back from a pandemic-driven slump.