Forex - Emerging currencies hit by growth fears after Fed minutes

  • Forex News
Forex - Emerging currencies hit by growth fears after Fed minutes
Credit: © Reuters. - Emerging market currencies fell on Thursday amid fresh investor nervousness over the outlook for global growth after the minutes of the Federal Reserve’s latest meeting, and as low oil prices continued to weigh.

Fears over the outlook for global growth intensified after Wednesday’s minutes of the Fed’s July meeting showed that officials believe the economy is nearing the point where interest rates should move higher, but noted that weakness in the global economy could still pose risks to the U.S. economic outlook.

Turkey's lira fell to a fresh record low against the dollar on Thursday and Kazakhstan's currency, the tenge plunged 23% after the country abandoned its peg and allowed the currency to float freely.

The lira fell to against the dollar as concerns over rising political tensions and recent terror attacks exacerbated concerns over the central bank’s reluctance to stem the persistent selloff in the currency.

The Turkish lira has tumbled 25% against the dollar this year, making it the second-worst performing emerging market currency after the Brazilian real.

Kazakhstan's tenge dropped to a record 195.89 against the dollar on Thursday after central Asian nation said it was switching to a free float in a bid to safeguard export growth.

Kazakhstan is central Asia’s biggest crude exporter.

The move comes after China’s shock devaluation of the yuan last week, with prompted a rout in regional Asian markets. Vietnam devalued the dong for the third time this year on Wednesday.

Concerns over slowing growth in China, previously a major engine of global demand, have hit investor demand for riskier assets, with commodities and emerging markets among the hardest-hit.

Recent steep declines in Chinese equity markets have undermined investor confidence in the government’s ability to revitalize economic growth.

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