Subscribe to RSS

Emerging market currencies pain continues as recent history repeats itself

In line with expectations, markets concluded the week suffering losses with the combination of alarming data from China and resumed selling in commodities weighing heavily on investor sentiment. With economic data from China causing concern and the depressed commodity prices leading to pressures on both global inflation prospects and those economies reliant on commoditylinked exports, it does look like recent history is repeating itself from the beginning of the year where the divergence in economic sentiment between the United States and those suffering from changing market conditions was heavily highlighted.

While the economic momentum in the US might not be as powerful as it was at the start of the year, the data remains robust and job creation is consistently proving itself to be the star performer of the US economy. At the same time, economic data from China continues to threaten further weakness in the economy and the figures from Europe remain largely unconvincing. This basically means that we are looking at the increased prospects of the divergence in economic sentiment between the United States and everywhere else returning as a dominant theme in market sentiment once again. When you also take into account that the Federal Reserve should be raising US interest rates during the second half of the year and I still expect the first interest rate hike to occur in September, this paints an overall positive picture for the USD.

What I am paying close attention towards right now is the emerging markets because these currencies are taking complete punishment from numerous different directions. A wide collection of currencies from the emerging markets have hit milestone lows within the previous nine months, with this being a global phenomenon not restricted to any specific geographical regions. This has included the currencies of Brazil, Chile, Columbia, Indonesia, Malaysia, Mexico, South Africa, Turkey and Russia with the reason for the damage to these currencies extending much further than the US interest rate outlook.

It is the combination of the threat of slowing trade from China, the price of commodities having not yet found a floor, and the expectations for the Federal Reserve to begin normalising monetary policy, that are behind this suffering and with these threats showing no signs of going away, these currencies are still exposed to further lows. It is important to begin stepping away from looking at the US interest rate outlook because the US economy is performing consistently and it is just a matter of time now before the Federal Reserve begin raising Interest rates. What does this mean? It is time to begin focusing on China because the correlation between concerns over China data and consequent pressure in commodities is extensive.

What investors and those interested in the emerging markets really need to begin focusing attention on is the economic data from China and resumed selling in commodities. The bottom line is that although the China GDP target of 7% is seen as a crucial benchmark after the government announced this level at its objective for growth, China can actually handle slower than expected growth as it attempts to shift its economy towards being more domestically inspired. However, other economies cannot handle a China that is possibly entering a deeper than previously expected downturn with this weighing on raw material exports and this ultimately means there could be more punishment when it comes to the pressures in the emerging markets.

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

Get 30% to 250% Forex Exclusive Bonuses – Insta Forex

Get 30% to 250% Forex Exclusive Bonuses – Insta Forex(0)

Get 30% to 250% Forex Exclusive bonuses on 1st deposit of reduction on one instrument of your choice. Every InstaForex client can get the 30% to 250% Exclusive bonuses from the deposited sum. Link:  Get 250% Bonus for First Deposit Link:  100% Special Deposit Bonus Promo Link:  $500 Forex No Deposit Free Bonus Link:  $1000

Receive $7 Forex Free No Deposit Welcome Bonus – FXCL

Receive $7 Forex Free No Deposit Welcome Bonus – FXCL(0)

Receive $7 Forex Free No Deposit Welcome Bonus the best start of your Forex Trading Career. The $7 Forex Free No Deposit Welcome Bonus Simply follow us on Facebook and Receive your reward straight to the balance of your live account without making any deposits. Link: Receive $7 No Deposit Forex Bonus Available to: All

Traders Party Hanoi Special Event Promotion – FBS

Traders Party Hanoi Special Event Promotion – FBS(0)

FBS Traders Party Hanoi Special Event Promotions Traders Party for Vietnamese clients. Make a deposit of no less than $500 and trade at least One lot Hurry, the seats are limited. Link:  Traders Party Hanoi Promotions Link:  $123 Forex No Deposit Bonus Promo Link:  $77.7 Free No Deposit Lucky Bonus Link:  $88.8 No Deposit Forex

$50 Free No Deposit Required Bonus Promotion – UFX

$50 Free No Deposit Required Bonus Promotion – UFX(0)

Get $50 Free No Deposit Required Bonus Explore all the mysteries of Forex Trading with free $50. Get your FREE $50 and start trading Special Bonus Promotion Trading is simple and it’s on us. Link:  100% Real Money CashBack Promotion Link:  $50 Forex No Deposit Bonus Promotion Link:  $50 Free No Deposit Bitcoin Bonus Link: 

Up to $1000 Bonus on all Deposits – Fort Financial Services

Up to $1000 Bonus on all Deposits – Fort Financial Services(0)

Up to 50% Bonus of Every Deposit to All New and Existing Traders. You Deposited $1000 on your account, chose a 50% bonus and got 500 extra dollars to the initial deposit amount. Link: Up to 50% Bonus of Every Deposit Link: $5 Forex No Deposit Welcome Bonus Link: 15% Support Margin Bonus Link:  Profit

Free $30 Earn Trade-able Trading Credit Bonus – Forex Time

Free $30 Earn Trade-able Trading Credit Bonus – Forex Time(0)

Switch to ForexTime and Free $30 Earn Trade-able Trading Credit Bonus. Join the hundreds of thousands of traders around the world who have already chosen ForexTime as a broker and Free Earn $30 Trade-able Trading Credit Bonus as a thank you for switching. Link:  Receive $30 Tradeable Credit Bonus Link:  Loyalty Cashback Promotions Link:  FX

$100 Risk Free Money on your Live Account – FidelisCM

$100 Risk Free Money on your Live Account – FidelisCM(0)

Get $100 Free Risk Forex Money on your Live Account There is no better way to trust more. Sign up for $100  No Deposit Bonus from FidelisCM Live Account and start forex trading now. Link: $100 Free No Deposit Forex Bonus Link: 200% Margin Bonus on all Deposit Available to: New and Existing clients Ending

$14000 New Accounts Bonus on Initial Deposits – AvaTrade

$14000 New Accounts Bonus on Initial Deposits – AvaTrade(0)

Up to $14000 New Accounts Bonus on your Initial Deposits to all new trading account. Open a new live trading account and verify it Make a deposit of no less than $100 and request the New Accounts Bonus. Link:  100% Bonus to Your First Deposit Link:  30% Sign-up Bonus on your Deposit Link:  Up to

Up to 200% Withdrawable Cashback Bonus – Forex Time

Up to 200% Withdrawable Cashback Bonus – Forex Time(0)

Always aims for profitable promotions for FXTM Customer, this time they have come up with a 200% Cashback Rebate Bonus promo which enables traders to earn up to 10,000 USD withdraw able Cashback bonus. Link:  Receive $30 Tradeable Credit Bonus Link:  FX Circuits Live Trading Contest Link:  Demo Forex Trading Contest Link:  Loyalty Cashback Promotions

$2500 Forex No Deposit Free Startup Bonus – InstaForex

$2500 Forex No Deposit Free Startup Bonus – InstaForex(0)

$2500 Free No Deposit Forex Bonus to Start Risk Forex Trading on InstaForex.com‎. With $2500 Free Forex Bonus you will be able to estimate our unsurpassed quality of order execution in live trading conditions with no risk and personal investments. Link:  Up to $5000 No Deposit Free Bonus Link:  $500 Forex No Deposit Free Bonus

read more

Forex Featured Broker

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories