Cairo - Emerging-market stocks and currencies headed for
the highest levels in 11 weeks as US President Donald Trump’s first days in
office produced no policy announcements to buoy the dollar.
Shares in the Philippines led gains, with the benchmark
index set for the highest close in almost three months. Ukraine’s hryvnia
advanced the most among developing peers. The Bloomberg Dollar Spot Index
retreated 0.6 percent, taking its loss since early January to 2.5 percent.
The dollar “rose a long way very quickly on little more
than hopes and dreams,” said Mark Cudmore, a Bloomberg strategist
based in Singapore. “If those hopes are not at least partially fulfilled
quickly, the dollar may correct sharply.”
Currencies
The MSCI Emerging Markets Currency Index advanced 0.4
percent to the highest level on a closing basis since Nov. 9. The hryvnia
gained 0.9 percent, heading for its strongest level since Jan. 5. South
Africa’s rand added 0.6 percent.
Stocks
MSCI’s gauge of stocks rose 0.6 percent to the highest
level on a closing basis since Nov. 8. Philippines Stock Exchange PSEi Index
jumped 2 percent, set for the highest close since October 28. Saudi Arabia’s
Tadawul All Share Index increased 0.8 percent, climbing for a third day.
What to watch
Israel’s central bank is due to announce its interest
rates decision at 4 p.m. in Tel Aviv. No change is expected, according to
economist estimates compiled by Bloomberg. For data and events, see Asia
Daybook, India Daybook, Taiwan Daybook, Middle East Daybook, Russia Daybook,
Africa Daybook, South Africa Daybook. Oil held a two-day advance after OPEC and
other producing nations agreed on a way to monitor compliance with their
pledged output cuts.
Analysis
Asian currencies are likely to maintain a pattern of
weakening in the first 100 days after the new US president takes office,
especially due to "Trump’s focus on the economy and trade protectionism
during his inauguration," HSBC Asian currency strategist Alastair Pinder
said in a research note. The Bank of Russia will resume interest rate cuts only
in March, despite pressure from an appreciating ruble, Bank of America
economist Vladimir Osakovskiy said in a research note