The dollar hit multi-year highs against the euro and yen and emerging markets were under mounting pressure on Tuesday, as the prospect of the first rise in U.S. interest rates in almost a decade stoked global volatility.
Emerging stocks rose for a second day after protesters in Hong Kong began talks with the government. Russian stocks climbed after their biggest weekly drop since July, while South Africa’s rand jumped against the dollar.
Emerging-market currencies strengthened, bonds from Poland to Turkey gained and stocks advanced for a second day as the European Central Bank unexpectedly cut all three policy rates.
Over two centuries ago, famed British banker Nathan Mayer Rothschild coined the trading phrase, “buy on the sound of cannons; sell on the sound of trumpets.”
While Poland’s squad missed its second straight World Cup this year, Poles may take a small bit of solace from the performance of their currency over the past few weeks.
The euro traded at almost a seven-week high against the dollar after a report showed Germany’s factory orders rebounded in June more than economists forecast, adding to signs the region is recovering.
New Zealand’s dollar fell to a five-week low vs. its U.S. counterpart after Reserve Bank Governor Graeme Wheeler said the central bank has sold the currency and may do so again to boost exports.
