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8 Jan, 2021 Author Emmanuel Louis Bacani
Emerging market currencies sustained their risk-on rally in December 2020, capping off a turbulent year with strong momentum that is expected to continue in 2021 as the global economy recovers from the coronavirus crisis.
The MSCI International Emerging Market Currency Index, which reflects the performance of 26 emerging-market currencies relative to the U.S. dollar, rose for the seventh straight month in December, gaining 1.6%, the second-largest increase on the year. [Emerging-market] currencies tend to rally when global growth and trade are improving and when investor sentiment is constructive, Georgette Boele, currency and precious metals strategist at ABN AMRO Group Economics, wrote in a Dec. 16 note. We expect such an environment in 2021.