Nearly two years ago, then-Fed Chairman Ben Bernanke (remember him?) suggested that the Federal Reserve was planning to gradually reduce the pace of its quantitative easing, a process that quickly became known as “tapering.”
It’s been an interesting start to what promises to be a interesting week in the forex market. The biggest story of Monday’s trade thus far has been the continued strength of the dollar despite disappointing data in the world’s largest economy.
Emerging-market stocks headed for the highest close in two weeks and most currencies strengthened on speculation China and the U.S. will maintain policies to support economic growth. Turkish shares rebounded.
Emerging stocks rose for a second day after protesters in Hong Kong began talks with the government. Russian stocks climbed after their biggest weekly drop since July, while South Africa’s rand jumped against the dollar.
Back in late January of this year, the so-called “Fragile Five” emerging markets (Brazil, Turkey, South Africa, India, and Indonesia) came under fire as traders sold their currencies in a mini-EM contagion.