Expect USD to remain bid against EM currencies - ING

FXStreet (Delhi) – Research Team at ING, expects USD to remain bid against EM currencies during the week, benefiting from ongoing China-related uncertainty and the decline in commodity prices (the oil price reached $28/bbl overnight as the market positions for the Iran supply entering the market).

Key Quotes

“While commodity prices remain under pressure, the PBoC decision to impose reserve requirements on offshore RMB (at 17.5%) may give some respite to higher beta assets today, though this is likely to translate into some stability rather than a sharp rebound. The near-term bigger picture remains unchanged, USD/EM (bar CEE) is likely to trend higher hence any short-term decline in USD/EM crosses (BRL, MXN, ZAR and TRY in particular) should be seen as an opportunity to establish new long positions.”