Emerging Market currencies: Hopes and Realities

Media coverage of Emerging Market currencies tends to oscillate between the very bearish and very bullish, with little differentiation between low and high-yielding currencies or between regional blocks let alone between the dozens of currencies still referred to, rightly or wrongly, as “emerging”. Price action in 2019 only partially vindicates this approach. News articles about the November EM currency rally

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Event risk and market volatility: Partners in crime

Market volatility has been reasonably subdued in recent weeks, despite acute event (and macro data) risk in the next four weeks, including of course US presidential elections on 3rd November, and a number of significant macro, policy and geopolitical developments. In the past month volatility in major developed and emerging market currencies versus the US Dollar has only risen materially

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What next for Asian currencies

Asian currency performance update – Moderate weakness in absolute and relative terms Asian currencies, bar the safe-haven Japanese Yen and Philippines Peso, have come under greater pressure this week as the number of reported coronavirus cases in China (and now 23 other countries) and reported deaths in China has increased (see Figure 1).     A GDP-weighted basket on Non-Japan

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Renminbi depreciation true to form

We noted in “Renminbi depreciation – Case of déjà vu” (16 May 2019) that the Renminbi’s performance since early March had been very similar to that of May-June 2018 and that if, as we expected, history was to repeat itself the Renminbi would weaken further. While the Renminbi Nominal Effective Exchange Rate was broadly stable between 16th and 30th May,

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Global central bank rate hikes: part solution, part problem

Too little attention has been paid to the global rise in central bank policy rates in the past 6-7 months and its implications for economic growth, CPI-inflation and currency and rates markets. Central bank rate hikes in Emerging Market (EM) economies, along in some cases with central bank FX intervention and other policy measures, have helped stabilise under-pressure currencies, particularly

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