Analysts see rebound in EM currencies as short-lived

New York

THIS month's advance in emerging-market currencies is turning into the rally no one seems to like.

An index of 20 developing-nation exchange rates is at an almost two-month high, recovering from a record low on growing speculation the Federal Reserve will keep interest rates near zero until next year. Yet Credit Suisse Group AG and Pacific Investment Management Co say the gains will prove fleeting, and most forecasters agree: All 23 emerging-market currencies tracked by Bloomberg are projected to weaken against the dollar by the first quarter, according to the latest analysts' forecasts.