That has put pressure on risky EM currencies, echoing the dynamics observed last year when the Fed began raising rates.
In the Sept. 1-6 poll, almost all beaten-down emerging market currencies were forecast to move little, or trade modestly higher against the dollar in a year, with some making small gains in three months.
The underperformance of China has probably been the biggest story holding back EM currencies."
Earlier this year, many analysts expected China's reopening to boost the yuan and other EM currencies, especially those exporting commodities to the world's second-largest economy, but this scenario did not unfold as anticipated.
Through the end of this year, we believe most EM Asia currencies can weaken," said Nick Bennenbroek, international economist at Wells Fargo.
Persons:
Chris Turner, Nick Bennenbroek, Hugo Pienaar, Devayani Sathyan, Veronica Khongwir, Jonathan Cable, Sharon Singleton
Organizations:
Treasury, greenback, Fed, ING, Reserve Bank of India, Korean, Bureau for Economic Research, Thomson
Locations:
BENGALURU, JOHANNESBURG, China, Asia, Wells Fargo, Russian, South Africa, Bengaluru