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Emerging-Market Currencies Hit By Strong Dollar

Published 04/25/2019, 01:29 AM
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* won, shares hurt by Texas Instruments (NASDAQ:TXN) outlook

* Russian rouble, stocks pulled down by lower oil prices

April 24 (Reuters) – Emerging-market currencies fell on Wednesday against a dollar strengthened by U.S. economic data. Stocks fell, with South Korean shares falling on worries that chip demand would weaken.

Data on Tuesday showed sales of new single-family homes in the United States rose in March to their highest in nearly a year and a half, strengthening the dollar.

MSCI’s emerging-market currencies index slipped 0.1 percent. Its index of developing-world stocks was last down 0.3 percent, after dropping to its lowest level in more than a week.

The strong U.S. data and upbeat U.S. corporate earnings results helped lift the dollar, Mizuho Bank analysts wrote in a note.

But comments by U.S. chipmaker Texas Instruments that a slowdown in demand for computer chips could last a few more quarters worried investors in South Korea, which relies on technology exports. Disappointing local corporate results also took their toll.

South Korean stocks slid 0.9 percent and the won saw its weakest levels since July 2017 before recovering some ground .

Turkey’s lira was 0.6 percent lower, on track for its worst one-day showing in nearly a week. A local holiday on Tuesday saw the currency largely insulated from that day’s 0.6 percent rise in oil prices.

“The country not only loses from a higher energy import bill, it loses doubly because the oil price is an important external driver of inflation,” Commerzbank (DE:CBKG) Analyst Tatha Ghose wrote in a note.

“While the central bank confidently proclaims that inflation will trend steadily down beginning H2, renewed lira weakness is already making a dent in this story.”

Turkish stocks traded up 0.3 percent, mainly on gains among financials and industrials.

Russia’s rouble weakened by 0.4 percent and equities slipped 0.3 percent, largely on weakness among energy stocks following a 0.4 percent drop in oil prices.

South Africa’s rand was 0.6 percent weaker and stocks dropped half a percent, on course for their worst one-day performance in about a month.

Concerns about electricity utility Eskom’s finances and impending local elections are weighing on the rand, Nedbank analysts wrote in a note.

Falling gold prices hurt some South African materials stocks, with mining company AngloGold Ashanti’s locally listed shares sliding 2 percent.

Emerging European currencies were weaker against the euro, with the Hungarian forint and Czech crown each slipping 0.1 percent against the common currency.

For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see

For TURKISH market report, see

For RUSSIAN market report, see (Reporting by Aaron Saldanha in Bengaluru, additional reporting by Olivia Kumwenda-Mtambo in Johannesburg, editing by Larry King)

The WisdomTree Emerging Currency Strategy Fund (CEW) was unchanged in after-hours trading Wednesday. Year-to-date, CEW has declined -5.40%, versus a 9.95% rise in the benchmark S&P 500 index during the same period.

CEW currently has an ETF Daily News SMART Grade of B (Buy), and is ranked #9 of 17 ETFs in the Currency ETFs category.

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