<\/p>\n
Emerging-market currencies fell for a fourth day as rising global bond yields spread tension across riskier assets around the world.<\/p>\n
MSCI\u2019s benchmark for developing-nation currency returns dropped 0.3% by 11:47 a.m. in London, heading for the longest streak of declines since June. The equivalent gauge for stocks fell 0.9%.<\/p>\n
The 10-year US Treasury yield rose to the highest in almost two decades as a jump in energy prices fuelled inflation concerns. That\u2019s adding pressure on riskier markets ahead of the Federal Reserve\u2019s interest-rate decision on Wednesday, where investors expect officials to raise short-term borrowing costs for the first time since July 2023.<\/p>\n
High-yielding EM currencies and those exposed to commodities such as the South African rand and Mexican peso have underperformed since the dollar started rebounding last week, and that trend has the potential to continue, according to Lee Hardman, senior currency analyst at MUFG Bank.<\/p>\n
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\u201cDownside risks for those currencies would intensify if rising bond yields and energy prices triggered a deeper correction lower for risk assets heading into year end,\u201d Hardman wrote in a note Tuesday.<\/p>\n<\/p>\n
In Europe, the forint fell as much as 0.5% against the euro given landlocked Hungary\u2019s strong exposure to energy price swings.<\/p>\n
\u201cThe worsening risk appetite has strengthened the dollar, and that puts pressure on high-beta emerging currencies such as the forint,\u201d said Janos Nagy, an analyst at Erste Group Bank AG in Budapest.<\/p>\n
Yields on 10-year government bonds rose as much as 10 basis points in Hungary and in the region\u2019s most liquid markets including Poland. Still, the region has attracted some bullish calls amid the enlargement of the euro area.<\/p>\n
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In international credit, Gabon\u2019s bonds surged after the government announced that an audit found the OPEC member\u2019s debt stock stood at $16.7 billion, almost a fifth below an initial estimate.<\/p>\n
In equities, eastern European bourses in Warsaw and Prague followed Asian declines, though the BUX in Budapest traded slightly higher. Hungarian technology and telecommunications group 4iG Nyrt. rose 4% after announcing plans to list on the Nasdaq.<\/p>\n
BlackRock has returned to an overweight recommendation on emerging-market equities, betting that access to the scarce resources needed for the artificial-intelligence boom and strong earnings will drive outperformance.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#Emerging #currencies #extend #losses #bond #market #stress #builds<\/p>\n","protected":false},"excerpt":{"rendered":"
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