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Emerging market currencies were in the firing line on Thursday as the sell-off in oil and metals intensified and concerns about China’s economy and the prospects of a June rate hike in the US rattled investors.
Currencies of commodity exporters were the hardest hit. The Russian rouble dropped 1.7 per cent to hit a near 7-week low of 58.38 per dollar after US and international crude prices both dropped 4 per cent.
Colombia, another major oil producer, saw its currency slide as much as 1.6 per cent to 2,977.50, the lowest level since mid-March. The Mexican peso, this year’s top-performing EM currency, gave up 0.9 per cent of its recent gains to trade back above 19 per dollar.
Countries whose economy depend heavily on mining also came under selling pressure, after prices for iron ore, copper, and nickel all took a leg lower amid renewed concerns over demand from China.
The South African rand is trading 1.4 per cent lower at 13.62 per dollar, a three week low. The peso of Chile, the world’s largest copper producer, is down 1 per cent at 676.40, a new low for the year.
The losses weighed on the wider JPMorgan Emerging Markets Currency Index, which dropped 0.6 per cent, its biggest one-day drop since March 28. However, the gauge remains up more than 4 per cent since the end of November.