Emerging-market currencies rallied and the lira jumped from a record low after policy makers in Turkey and Russia stepped up sales of foreign-currency reserves to counter a selloff in developing-nation assets.

Turkey's central bank sold a record $750 million for liras in an auction today, increasing the total intervention since Aug. 5 to almost $4 billion. Russia sold $1.15 billion yesterday, a "bigger than usual" step, and $8 billion last month, Bank Rossii Chairman Sergey Ignatiev said today in Moscow. The lira rose 0.9 percent versus the dollar at 2:44 p.m. in London and the ruble gained 0.3 percent.

After struggling to stop appreciations earlier this year caused by capital inflows, central banks in Poland, Malaysia and the Philippines are intervening to shore up currencies amid concern the global economic recovery may stall. South Korea's foreign-exchange reserves fell the most in almost three years in September, the Bank of Korea said today. Taiwan's central bank said it "doesn't favor" currency weakness.

"Whether interventions will be successful or not depends on how much panic we'll see in markets," said Elisabeth Andreew, a Copenhagen-based strategist at Nordea Bank AB. "Right now markets have calmed down a bit."

Emerging-market bonds and stocks rallied today amid speculation European leaders are examining measures to shield banks from the region's sovereign-debt crisis.

Eoin Treacy's view The US Dollar has rallied aggressively over the last seven weeks, particularly against the currencies of commodity producing countries and Asian growth markets. The weakness of their respective currencies is probably less of an issue than the speed with which it has occurred. The sudden deterioration of emerging market currencies versus the US Dollar has been debilitating for investor sentiment. Coupled with enormous volatility on stock markets, with intraday moves of more than 4% commonplace, risk aversion has become a major theme.

Over the last decade many Asian and Latin American countries have built up sizeable foreign currency reserves. This suggests they have a certain amount of firepower with which to support their respective currencies should they wish. Whether this is an advisable course of action is rather questionable. The US Dollar is rallying from a comparatively depressed level. It is somewhat overbought in the short-term but has broken above its 200-day MA against the Russian Ruble, Turkish Lira, Taiwan Dollar, Korean Won, and Brazilian Real among a large number of others. While there is scope for an unwinding of its overextension relative to the trend mean a sustained move below the MA would be required to indicate a return to demand dominance for European, Asian and Latin American currencies.