EMERGING MARKETS-Turkish lira leads EMEA FX lower as vaccine rally cools

Turkey's lira led losses on Tuesday as emerging markets in Europe, Middle East and Africa came off a strong rally on news of major progress in a coronavirus vaccine, although concerns over the pandemic's economic impact persisted. Trade-exposed currencies had rallied on Monday after drugmakers Pfizer Inc and BioNTech SE flagged a 90% efficacy rate for their vaccine, while Joe Biden's taking of the presidency raised hopes of calmer U.S. trade policies.

Reuters | Updated: 10-11-2020 14:30 IST | Created: 10-11-2020 14:30 IST
EMERGING MARKETS-Turkish lira leads EMEA FX lower as vaccine rally cools

Turkey's lira led losses on Tuesday as emerging markets in Europe, Middle East and Africa came off a strong rally on news of major progress in a coronavirus vaccine, although concerns over the pandemic's economic impact persisted.

Trade-exposed currencies had rallied on Monday after drugmakers Pfizer Inc and BioNTech SE flagged a 90% efficacy rate for their vaccine, while Joe Biden's taking of the presidency raised hopes of calmer U.S. trade policies. The lira fell 2.3% after surging more than 5% on Monday, as it also benefited from near-term expectations of an interest rate hike, after changes to Turkey's top economic officials.

The currency had seen its best day since the aftermath of a 2018 financial crisis. Still, it was trading dangerously close to a record low. South Africa's rand retreated from an eight-month high, shedding about 0.7% to the dollar. The South African economy was among the hardest hit by coronavirus-driven lockdowns in the emerging market space, and is expected to struggle with elevated debt levels in the mid-term.

Losses in the Russian rouble were mitigated by an overnight jump in oil prices. Still, the currency was pressured by expectations that a Biden presidency may take a tougher stance on Moscow. Hungary's forint was flat to the euro, having missed out on Monday's rally after the country outlined new, partial lockdown measures to curb the spread of the coronavirus. October inflation also came in below expectations, pointing to pressure on consumption from the pandemic.

The Czech crown retreated to the euro after October inflation missed forecasts. Central European markets have come under pressure recently due to a rise in coronavirus infections in the region. While news of the vaccine had sparked an immediate rally, analysts were sceptical over its availability and long-term efficacy. They also said the economic scars of the pandemic would persist well beyond the advent of a cure.

"Having said all that though, we are a step closer than yesterday in finding the cure for this virus, which combined with Biden’s victory, may allow investors to jump back into the action and push risk-linked assets back up," said Charalambos Pissouros, senior market analyst at JFD Group. Emerging market stocks fell 0.4% off a more than 2-1/2 year high, with Asian bourses retreating from strong gains.

Elsewhere, Peru was plunged into political upheaval after President Martín Vizcarra was ousted by the Congress on Monday in an impeachment vote over corruption allegations. For GRAPHIC on emerging market FX performance in 2020, see http://tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2020, see https://tmsnrt.rs/2OusNdX For TOP NEWS across emerging markets

For CENTRAL EUROPE market report, see For TURKISH market report, see

For RUSSIAN market report, see

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


TRENDING

OPINION / BLOG / INTERVIEW

China: A savior for emerging markets or a poison pill?

... ...

Future of Urban Planning: Artificial Intelligence guiding the way

Advances in emerging technologies like Artificial Intelligence and Machine Learning can help us understand our cities better and derive useful insights from real-time data collected through automated models....

Videos

Latest News

Guj board to HC: Will forward proposal on Gir forest rail line

The state wildlife board hasdecided to forward, to the national board, for considerationthe Railways proposal to upgrade the existing meter gauge linealong with electrification of the track that passes throughthe Gir Wildlife Sanctuary, the...

George Clooney to be honoured by AARP The Magazine

American actor George Clooney will receive this years career achievement honour at AARP The Magazines Movies For Grownup Awards in March. According to Variety, AARP CEO Jo Ann Jenkins said in a statement, We are delighted to honour George C...

DIY, cooking at home have led to premiumisation: Reliance Retail CEO

Lockdown has pushed the pace of digitisation in the retail segment and trends like do it yourself DIY and cooking at home have led to premiumisation of the purchase basket, Reliance Retails CEO for Grocery Retail Damodar Mall said.Lots of g...

MP: Eggs, mutton found being sold in public toilet of Indore

A public toilet in Indore wasbeing used for selling eggs and mutton, which prompted thecivic body to take action against the facility, an officialsaid on Wednesday.This came to light during the Indore MunicipalCorporations IMC inspection at...

Give Feedback