Currency traders are rejecting warnings from International Monetary Fund Managing Director Christine Lagarde that volatility will increase as the Federal Reserve pares its unprecedented stimulus program.
The Thai baht headed for its biggest monthly decline since May and 10-year sovereign bonds dropped as overseas funds cut holdings of the nation’s assets amid concern political unrest will hurt economic growth.
The euro climbed for the first time in three days versus the dollar as European stocks rose. Emerging-market currencies weakened and gold fell on the outlook for Federal Reserve stimulus and as a typhoon wreaked damage in the Philippines. U.S. shares rose to trade near a record.
Asian currencies posted their first monthly loss since August, led by Indonesia’s rupiah and the Thai baht, as concern about current-account deficits and political unrest in the region fueled fund outflows.
Asian currencies completed the first weekly loss in more than a month on speculation the yen’s slide to beyond 101 per dollar will prompt some regional policy makers to weaken their exchange rates to protect exports.
Thailand’s baht headed for the biggest monthly advance since July 2011 as international investors increased holdings of the nation’s assets, while the central bank upgraded its economic growth forecast.