JOHANNESBURG - Emerging market currency gains will probably be dominated by high-yielding currencies rather than low-risk bets next year as economic growth finally recovers in response to lower interest rates, a Reuters poll found on Thursday.
ING Financial Markets wrote that while it sees a modest slowdown in Chinese growth, it expects recoveries in the likes of Brazil, Russia, Mexico, India and several other Asian countries, meaning the growth outlook favors emerging versus developed market currencies.is expected to be one of the notable gainers in emerging markets against the dollar, firming to 3.97/$.
“After all, some of these large emerging market monetary easing cycles and big currency declines should be providing some support,” the ING note added. However, the Reuters poll suggests the lira - which was considered very cheap earlier this year - will be tested next year, to the tune of about 10% losses to 6.34 per dollar.
In Latin America, an outburst of protests is adding pressure on the central banks of the region’s two main economies, Brazil and Mexico, to keep easing in order to accelerate tepid growth and avoid an ugly social outcome as in Chile, Ecuador and, to a lesser degree, Colombia. Both currencies are entering the new year on the defensive, on worries about the effectiveness of reforms and outstanding trade issues with the United States.
Bolivia was the best example of emerging market, with the Bolivian Coup, the financial mafia switched the values. Bolivia has lithium and it was heading to better the lives of the people. Boliviacoup EvoPresidenteLegitimo 🇧🇴
that's doubtful. The carry will balance rather quicly.