The passive, fully funded currency indexes provided to EuromoneyFXNews show EM currencies all produced negative returns in the month, and on a larger scale than the losses registered in April, when risk aversion began to emerge. It gathered a much greater momentum after Greece announced new elections on May 15 after the country had failed to form a coalition government. The worst performer was the CEEME index, which lost 7.99%, after shedding 0.54% in April, which largely reflects a typical “risk on/risk off” drive price signals, and the fact that it is the index is most closely located to the eurozone crisis.
Meanwhile, the EM Top 10 index also suffered, losing 6.22%. The Russian ruble was the worst performing of all EM currencies losing 11.62%, while India’s rupee also lost 5.55% reflects the economic malaise in the country and a view that it remains vulnerable to external shocks. The Brazilian real lost 5.79%. The index also includes Mexico, Korea, Indonesia, Poland, Turkey and Taiwan.
The Commodity Currencies index was the second worst performing index, losing 7.26%.
Index May return
Africa -1.21%
Asia -3.47%
EM Top 10 -6.22%
Latam -3.47%
CEEME -7.99%
Commods -7.26%
Source: Independent index provider