This EM FX daily update highlights how US-Iran negotiation headlines are boosting risk sentiment, impacting currencies like the ZAR, HUF, and ILS. It also notes a likely SARB rate hike cycle following South Africa's April inflation print.
Key Takeaways
- 1.Middle East geopolitical developments, specifically potential US/Iran peace negotiations, are the primary driver of risk sentiment across EM FX markets.
- 2.South African inflation rose to 4% in April, leading economists to forecast a 50-75bps policy rate hike from the SARB this year.
- 3.The Russian Ruble remains supported by weak import demand and high oil prices, despite temporary reversals in early trading.
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Authors
Laoise Ni Thighearnaigh
Securities
USDRUBUSDTRYEURHUFUSDILSUSDKZT
Themes
Geopolitical risk driving EM risk-on/risk-off sentimentEM Central Bank tightening
Regions
EuropeAfricaMiddle EastSouth AfricaRussiaTurkey