Most emerging-market currencies fell Thursday on the back of a stronger dollar after US retail sales signaled consumer resilience in the world’s largest economy despite sharply higher gasoline prices.
The MSCI Emerging-Market Currency index edged lower, ending the session down less than 0.1%. The South African rand, the Chilean peso and the Mexican peso were among biggest laggards, while the dollar gained 0.3% — its biggest daily advance since April 29.
Data on Thursday in the US showed that retail sales advanced for a third month in April, rising 0.5% after a revised 1.6% gain in March. The report is the latest to highlight the resilience of the US economy.
“Encouraging US retail sales activity argues for the Fed to stay restrictive for longer, which is USD supportive,” said Elias Haddad, global head of markets strategy at Brown Brothers Harriman & Co.
The Brazilian real led gains, rising 0.6% against the dollar and reversing some of the losses in the previous session. Markets were roiled Wednesday after a news website linked right-wing presidential candidate Flavio Bolsonaro to Daniel Vorcaro, the jailed former chief executive of a bank at the center of a massive fraud probe.
Oil, meanwhile, wavered throughout the session, with Brent futures trading above $106 per barrel following a meeting between US President Donald Trump and Chinese leader Xi Jinping, where discussions included the war in Iran and increased oil ties between the two nations.
Developing world equities advanced 0.7%, rising for the third time in four days as technology companies in Taiwan and China joined a hot streak kicked off by South Korean peers. The stocks were buoyed by optimism that talks between the US and China will improve trade ties and boost demand for artificial intelligence-related hardware and services.
Chipmakers have led the rebound in stocks since the beginning of April, as earnings upgrades overshadowed concerns about the Iran conflict spurring inflation. Expectations of a thaw in US-China relations during President Trump’s visit backed demand for AI-related companies, as China’s leader signaled that Beijing may be open to business deals and purchasing commitments.
While the information technology index jumped 1.4% on Thursday, other sectors including materials, energy and industrials fell, marking the gap between Asian tech and the rest of emerging market stocks.
“Emerging-market stocks are completely bifurcated into AI and non-AI,” said Kamil Dimmich, a partner at North of South Capital. “As long as US hyperscalers and AI companies continue to grow their capex, this is not likely to change as earnings at their Korean and Taiwanese suppliers eclipse everything else.”
This article was generated from an automated news agency feed without modifications to text.
