Investors who expect the global economy to keep slowing may profit by selling the Chilean peso and buying Brazil’s real, Mike Moran, a strategist at Standard Chartered Plc in New York, said yesterday in a phone interview.
Latin American currencies will probably stabilize after renewed optimism about the global economy fueled the biggest monthly rally since 2009, according to the top forecaster for the region in Bloomberg Rankings.
Peru’s sol had its biggest weekly rise since August as the Federal Reserve’s measures to boost the U.S. economy lifted commodity prices and fueled demand for higher-yielding, emerging-market currencies.
The yen rallied against all of its 16 most-traded peers after it failed yesterday to weaken beyond 100 to the dollar, a level not seen in four years, and a technical indicator signaled it had fallen too much, too fast.
The yen stopped just short of 100 to the dollar, a level it hasn’t reached in four years, as it slid after the Bank of Japan announced unprecedented stimulus measures on April 4 to end 15 years of deflation.
The euro rose against the dollar and the yen, snapping five days of losses, as speculation that European policy makers will boost the firepower of their rescue fund eased concern the region’s debt crisis will worsen.
Emerging-market currencies that three weeks ago showed the least volatility in a decade are dropping as traders bet slower expansion and an end to interest rate increases may weaken exchange rates from Sao Paulo to Moscow.