Emerging market currencies remained stable on Tuesday after strong advances marked the previous session, attributed to concerns over potential yen intervention, impacting the dollar. This movement came as heavyweight Asian equities spearheaded a notable rally in global stock prices.
The MSCI index tracking global emerging markets stocks climbed by 1.2%, achieving a record high for the fourth consecutive session. Asian markets led the charge, with South Korea’s index surging 2.7% to hit an all-time high. Gains were seen across Thailand and Hong Kong, driven largely by a growing appetite for AI stocks. Such optimism helped mitigate tensions stemming from U.S. President Donald Trump’s threat of higher tariffs on South Korean imports.
In response, South Korea promptly reassured the U.S. of its dedication to the trade agreement, with officials expressing confidence in swiftly passing relevant legislation. Meanwhile, the market’s eyes are on potential interventions affecting the Japanese yen and the forthcoming European monetary policy decisions. Amid geopolitical tensions, Ukraine aims to secure U.S. security guarantees contingent on a peace accord with Russia.