Emerging market currencies turned positive for the day and stocks added to gains as markets brushed past higher-than-expected U.S. inflation figures, with a central bank leadership change in Mexico denting the peso, reports Reuters.
U.S. inflation for May rose more than expected, but not enough to for the U.S. Federal Reserve's to change its loose monetary policy, analysts said. The European Central Bank kept stimulus taps wide open at its meeting.
"It is eye-popping but it's important to consider where we are versus a year ago," said Scott Brown, chief economist at Raymond James in Florida. "I don't think there is any reason for the Fed to panic."
MSCI's index of EM currencies rose 0.1% with Brazil's real rallying strongly as attention turned to
next week's central bank meeting. Analysts increasingly see a rate hike to control inflation, which would make the currency an attractive high yielder for carry trade.
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