Emerging Currencies Soar to New High as Fed Hike Bets Fade

The value of emerging currencies has reached a record high as traders reassess the likelihood of a Federal Reserve interest-rate hike in September.

An index tracking developing-world currencies, MSCI's EM currency gauge, rose by 0.2% on Monday, with the Malaysian ringgit and Taiwanese dollar leading gains.

The Bloomberg Dollar Spot Index dropped for the third consecutive day as investors scaled back bets on a Fed hike in September, with the probability now at one-in-three, down from around 75% in late July.