Emerging Market Currencies Rise on Japan
NEW YORK ( TheStreet) -- Emerging market currencies were on the rebound Tuesday morning as risk appetite returned on better clarity of Japan's nuclear reactor situation and central banks around the world coordinated efforts to suppress the yen's rise.
The Chinese yuan was up 0.07% at 6.551. Earlier, the Chinese currency strengthened to a 17-year high against the dollar, reaching 6.5552 on chatter that China will be hiking interest rates and letting the yuan appreciate in order to cool inflation. The WisdomTree Dreyfus Chinese Yuan Fund (CYB) was flat at $25.34.
The South African rand was gaining 0.6% against the U.S. dollar at $0.14446 as the Brazilian real rose 0.2% against the dollar at $0.5999, even amid rising inflationary pressures in Brazil. The WisdomTree Dreyfus ETF BZ Real Fund (BZF) was flat at $27.
The rand advanced as South Africa's Reserve Bank reported that Africa's largest economy narrowed its current account deficit to 0.6% of gross domestic product in the fourth quarter from a revised 3.1% in the quarter before as platinum and coal exports strengthened.Analysts surveyed by Reuters were expecting a deficit of 2.55%. The iShares MSCI South Africa Index (EZA) was up 0.8% to $67.58. "Risk sentiment has been stable in Asian hours, mainly as a reaction to more stable conditions at Japan's nuclear reactors and yesterday's constructive performance in U.S. stock markets," UBS foreign exchange strategist Manuel Oliveri had said in an early report. Japanese workers who were forced to evacuate nuclear power plants at the height of the nuclear crisis when the facilities began emitting smoke, have returned to work to restart nuclear cooling systems.
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