LONDON: South Africa's rand hit a one-month low on Friday, a day after reporting a record trade deficit, while Hungary's forint slipped on concern the central bank's new governor may take aggressive measures to pump cash into the economy.
The rand breached the key 9.0 barrier against the dollar, driven down by Thursday's trade data. This brings its losses so far in 2013 to 6.3 percent.
Tradition Analytics said in a note the scales were "tilted in favour of further rand weakness and volatility and will keep investors more inclined to hedge their positions through a long dollar position of sorts."
In Hungary, Economy Minister Gyorgy Matolcsy was appointed central bank governor on Friday, in a widely expected move which investors fear will lead to politically guided monetary policy aimed at reviving the recession-hit economy.
The forint, which has fallen 1.3 percent so far this year ahead of the appointment, inched down and was just off a four-week low.
"My sense is that in the very short term Matolcsy will be sensitive to market concerns," Timothy Ash, analyst at Standard Bank, said in a note.
But if the economy fails to take off and public opinion turns against the ruling party "rates will be pushed aggressively lower and I would not be surprised if the central bank gets more actively involved in exchange rate management," Ash said.
The benchmark emerging equity index traded flat after modest gains on Thursday, with disappointing Chinese manufacturing data weighing on Asian markets.
The data adds to the gloom on emerging markets growth, with India posting 4.5 percent growth in the last 2012 quarter.
Emerging equity funds suffered outflows for the first time in almost six months, data from EPFR Global showed, losing $1 billion.
Emerging bond funds took in $696 million, though hard currency bonds witnessed further outflows, shedding $399 million.
Argentina's 2017 dollar bond is trading around 70 cents on the dollar, near record lows hit in November 2012.
The country looked set to lose a court appeal in New York to avoid paying hold-outs from a 2001 debt default, a verdict which could lead to a further major default.
Comments
Comments are closed.