Fed fails to ignite broader EMFX...>

EMERGING MARKETS: Fed fails to ignite broader EMFX rally

-Following the Fed's 25bps trim to rates yesterday, EMFX on the whole failed to

find much of an upside catalyst, with divisions among the FOMC board seen as

limiting the appetite for further monetary support. Asia-Pac FX currencies

generally fell, with CNY, SGD and KRW falling, although INR continues to recover

from the week's worst levels. Dismal options and futures volumes for DMFX have

been countered by more activity in EM today, with USD/KRW and USD/THB hedging

activity in particular keeping markets busy.

-USD/TRY remains well within the now familiar channel of the 100- and 50-dmas at

5.7775 and 5.6747 respectively. TRY sits at the bottom-end of the table, with

particularly soft Turkish equities helping pressure the currency.

-ZAR has been slightly shielded from any read through from the Fed, as the South

African Reserve Bank decision takes focus. The majority of analysts see rates

unchanged at 6.5%, with a minority seeing a 25bps trim to the main policy rate.

Resistance/support is well defined, with the 100-dma providing a floor at

14.5847 and the resistance at the 50-dma at 14.7464.