Advertise On EU-Digest

Anual Advertising Rates

3/10/15

Global Economy: Why EM currencies matter to every investor - by Alex Rosenberg

Currencies like the Turkish lira and the Brazilian real may not always be foremost on investors' minds.
But according to Scotiabank's chief FX strategist, Camilla Sutton, emerging market currencies are sending powerful signals about what the U.S. dollar will do next—and could convey a loud message to the Federal Reserve.

As the dollar has surged this year and oil has continued to crumble, emerging market currencies have felt the pain. The real has fallen 16 percent against the dollar year to date, dropping nearly a full percent on Tuesday alone—a huge move for a currency.

The lira has been another big decliner, retreating 1.2 percent against the dollar on Tuesday, for a 13 percent drop on the year. And the Mexican peso is at all-time lows against the greenback.

Obscure as these moves might sound, Sutton says that if they intensify, they could actually cause the Fed to delay rate rises.

Read more: Why EM currencies matter to every investor: FX pro

No comments: