EMFX Weakness Hits Reverse as US Yields Underscore Sentiment

The extended rollover in US yields is supporting EM FX, with PLN, ZAR and MXN among the major currencies at session highs. The moves are being underpinned by both the pullback in the DXY index as well as the surge in major equity indices.

• EURHUF and EURPLN are both in the red, though are trading above firm support at their 50-day EMAs, intersecting today at 385.19 and 4.5579, respectively. ZAR is the standout performer in the region, with USDZAR down a notable 1.2% at typing, though the pair still looks to end to week ~1.9% higher.
• MXN is leading gains in Latam - USDMXN is down 0.5% but well clear of key support that has been defined at 17.3498, the Sep 29 low. USDBRL is at session lows, and as previously noted, a negative close for the pair today would be the first since Monday, despite the uptrend characterised by five consecutive sessions of higher highs signalling the upside momentum in the near-term.