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Emerging market currencies mixed as dollar rebounds after US buyback plan

The MSCI EM Currency index finished up 0.1%, while the Colombian peso fell 1% and the Brazilian real slipped 0.3% as investors treated the buybacks as temporary.

Reported · Written up by our desk · EM Currencies

Emerging-market currencies were mixed on Thursday, with the US dollar regaining strength after the US Treasury announced larger bond buybacks, a move markets viewed as potentially temporary, according to LiveMint Markets citing Bloomberg. The greenback index stayed positive even after Treasury Secretary Scott Bessent reiterated that bond buybacks could exceed $4 billion per issue, which weighed on some Latin American currencies. The Colombian peso dropped 1% to lead the declines, while the Brazilian real fell 0.3%. South Africa’s rand also weakened against the dollar. Overall, the MSCI EM Currency index rose 0.1% by the end of the session. In Asia, Indonesia’s rupiah reached its strongest level in two months versus the dollar, supported by expectations that a potential equity-related headwind would be delayed, after FTSE Russell deferred stock index changes. Separately, the South Korean won slid after reaching an 11-month high in the prior session, while South Korea’s Kospi rose for the first time this week, supported by gains in major chip-related names including Samsung Electronics, SK Hynix, and Taiwan Semiconductor Manufacturing, which also lifted the emerging market equity gauge tracked by MSCI.

Latest closeFTSE 100 10,772.70 ▼0.6%|Kospi 6,813.34 ▲3.6%

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