I like a number Latin American FX majors against the US dollar, but for very different reasons. In Mexico’s case, strong currency performance will continue to be driven by the carry trade, whereas in Brazil the demand for both yield and capital appreciation will keep upside pressure on the real. This view is best highlighted… [Read more]
My colleagues and I continue to see further medium-term weakness for the US dollar and, in this respect, favour emerging market (EM) currencies. Our top picks in our key market views are the Chilean peso (CLP) and the Singapore dollar (SGD). Our other EM favourites include the Mexican peso (MXN), Brazilian real (BRL) and South… [Read more]
Business Monitor’s bullish stance on a host of emerging market (EM) currencies in recent quarters reflects one of our core macroeconomic assumptions, namely that unprecedented quantitative easing and loose fiscal policy measures in the US in 2009 would ultimately foster significant depreciatory forces for the US dollar. While this may not be visible in the… [Read more]
After a rough 2009, Mexico’s economic fundamentals look set for a breather over the next couple of months, as exports, manufacturing and unemployment levels continue to benefit from unprecedented fiscal stimulus north of the border. If the US Federal Reserve opts to keep the monetary floodgates open for a while longer, this could translate into… [Read more]
February was a bad month for the Mexican peso, hitting record low after record low, before closing out the month some 7% weaker than where it had started. Yet while Mexican Finance Minister Augustín Carstens assures us all that the currency is oversold, Mexico’s economic readings appear to be telling a very different story. In… [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]
