Helped by a 25bps hike in eurozone interest rates to 1.25% on Thursday, the euro has broken through US$1.4300/EUR to trade at a 14-month high of US$1.4441/EUR at one stage on April 8, in line with BMI’s bullish view of the currency. In fact, my colleagues and I envisage further short-term gains to our upside… [Read more]

If a picture is worth a thousand words, than here is a 3,460 word essay which illustrates the problems Nigeria is having with its currency, and why I think the naira has further to drop. Start with chart one, which shows the total amount of US dollars the central bank sells to commercial banks each… [Read more]

In these uncertain times, RiskWatchdog’s quest for finding relative value in emerging markets currencies has been a challenge to say the least, with only a handful of high-yielders like the Turkish lira and Kenyan shilling showing even a glimmer of upside potential. Nevertheless, one chart that found its way onto my desk this morning was… [Read more]

If you think emerging Europe currencies have run their course to the downside, take another look at the CIS (Commonwealth of Independent States). This being the only European sub-region dominated by dollar pegs, monetary authorities for the most part have only recently succumbed to mounting fundamental pressures. While the Ukrainian hryvnia, Russian rouble and Georgian… [Read more]

It was not too long ago that everyone was asking ‘when will China finally let the yuan go?’ [i.e. appreciate rapidly]. Indeed, back in March, when consumer price inflation was at 8.3% y-o-y, non-deliverable forwards (NDFs – a basic measure of investors’ expectations) were pricing in 13% appreciation for the yuan over the following 12… [Read more]

Is China entering a time of troubles? Yesterday’s 0.27% interest rate cut – the first in six years – and today’s 4.5% fall in the Shanghai Composite Index to a 20-month low of 1,987 may suggest so. The stock market is now down 68% from its peak in October 2007, and I do not preclude… [Read more]

My fears about a sharp and extended drop in the Korean won seem to be coming true (see South Korea: A Collapse Of The Won?, 21 August 2008, and Will Citizens Have To Donate Jewellery Again, 4 August 2008). The currency hit a fresh 45-month low of KRW1,090/US$ today, after punching right through very strong… [Read more]