Rate hikes no cure to EM foreign exchange weakness

MSCI’s emerging currency index remains 1.6% below a peak in June and few traders appear willing to stick their heads above the parapet as officials from at least 13 developing nations prepare to make monetary policy decisions in the coming days. (File pic shows a statue of a bull standing in front of an electronic board displaying stock prices outside the Indonesia Stock Exchange (IDX) in Jakarta,)

NEW YORK: Traders are betting that emerging-market (EM) currencies will remain vulnerable into the new year, even as central banks from Moscow to Mexico City are set to push ahead with interest-rate hikes that theoretically should attract investors.

MSCI’s emerging currency index remains 1.6% below a peak in June and few traders appear willing to stick their heads above the parapet as officials from at least 13 developing nations prepare to make monetary policy decisions in the coming days.