EM currencies: not all weakness is bad

Best and worst spot returns across emerging markets*

Emerging market currencies have been at the forefront of negative sentiment in recent times, yet to assume all currencies are highly volatile is inaccurate.  Over the last six months a currency adjustment has taken place, we believe, either due to market pressure, or due to deliberate policy shifts.  Not all weakness is bad, and not all currencies have weakened.

*Source: Bloomberg. Spot currency returns based on a 6 months period in USD to 18.02.2014

Colm McDonagh, Insight Investment

 

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