Emerging markets currencies suffered a bout of whiplash in the wake of the Federal Reserve’s decision to raise interest rates and tighten policy at a quicker pace this year. The Fed’s decision, as well as its upgraded economic forecasts, pushed the US dollar higher. The DXY index, which tracks the greenback against a weighted basket of global peers, was up 0.1 per cent to 93.861. It had been about 0.25 per cent lower before the policy announcement.
Among major currencies, the yen hit a three-week low against the dollar of ¥110.84, before recovering to trade 0.2 per cent firmer at ¥110.54. The euro sat 0.3 per cent firmer at $1.1791, but had been up as much as 0.5 per cent higher and 0.2 per cent lower. Emerging markets currencies saw some vigorous action.
The Turkish lira was 1.1 per cent weaker, with one dollar buying 4.6758 lira, but had fluctuated between declines of 1.8 per cent and 0.8 per cent. Brazil’s real weakened by as much as 0.6 per cent and had been as much as 0.4 per cent stronger in the wake of the decision. At pixel time, the real was flat at 3.716 per dollar.
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