TOKYO: Emerging market currencies rallied Tuesday after Federal Reserve boss Janet Yellen said any interest rate rise would be gradual, while the pound surged as it witnesses volatility weeks before a vote on its future in the European Union.
The oil-reliant Malaysian ringgit and Indonesia's rupiah each rose more than half a percent against the dollar on Tuesday as analysts said Yellen's remarks effectively ruled out a summer hike, brightening the outlook for stock markets and emerging currencies.
After Friday's dismal US jobs report for May raised worries about broader growth in the world's largest economy, Yellen said that while they were "concerning" she was still upbeat about the outlook.
She did not give any indication of when the US central bank, which is scheduled to hold a policy meeting next week, would again lift interest rates but said any move would be slow and low.
"A June rate hike is effectively off the table," Jason Wong, a currency strategist at Bank of New Zealand, said in a commentary.
"The market is thinking that unless we get a strong bounce-back in employment, then July is not looking likely either."
On Tuesday, the greenback rose to 107.80 yen from 107.57 yen Monday in New York, while the euro edged up to $1.1360 and 122.49 yen from $1.1355 and 122.15 yen.
Among emerging units, the dollar slipped 0.6 percent against the ringgit and rupiah, while falling 0.4 percent against the South Korean won.
The British pound sharply fluctuated after opinion polls suggested more people were in favour of leaving the European Union, just weeks ahead of a referendum on June 23.
It rose to $1.4550 from $1.4439 in US trade, after advancing as much as 1.5 percent -- briefly touching $1.4660.
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