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Dollar Rebounds as Buyback Boost Seen Fleeting
21 Aug
Summary
- Emerging market currencies fluctuated as the dollar strengthened.
- Colombia's peso was the worst performer, falling 1%.
- Indonesia's rupiah reached a two-month high against the dollar.
Emerging market currencies saw a mixed performance on Thursday, influenced by the US dollar's recovery. The US Treasury's announcement of increased bond buybacks was widely perceived as a short-term strategy, allowing the dollar to regain ground. Treasury Secretary Scott Bessent reiterated the policy, suggesting buybacks could exceed $4 billion per issue, putting pressure on several Latin American currencies.
The Colombian peso led the decline, falling 1%, while the Brazilian real and South Africa's rand also weakened. In contrast, Indonesia's rupiah reached a two-month high, boosted partly by FTSE Russell's decision to defer stock index changes. Meanwhile, the South Korean won experienced a downturn after an earlier rally, even as its stock market advanced.
