http://www.forexconspiracyreport.com/be-careful-of-emerging-market-currencies/
Be Careful of Emerging Market Currencies
As the risk of inflation in the USA backs off it is clear that the Federal Reserve will be in no hurry to raise interest rates and drive up the dollar. Emerging market currencies had their best quarter this decade on the news. But all good things must come to an end. Bloomberg writes to beware the rally in emerging market currencies.
Beware the rally in emerging-market currencies: the best quarterly performance in almost seven years is about to reverse.
“We don’t see continued appreciation through the rest of the year,” said Nicholas Bennenbroek, head of currency strategy at the U.S. bank in New York. “Federal Reserve interest-rate increases should continue at a steady pace, which should weigh on most foreign currencies, including Asian currencies.”
In other words US interest rates will not go up fast but they will go up. And tensions on the Korean peninsula will not be good for North Korea, Japan or China. What other specifics tell us to be careful of emerging market currencies?
Australia Losing Buyers in China
The slowing Chinese economy is taking a toll on Australia, a major supplier of coal, iron ore and other commodities. Pound Sterling Live says the AUD is increasingly fragile.
“The Aussie Dollar’s long-term technical forecast was in danger of being upset last week but the pair’s recent tumble back to support has revived the bear’s hopes for a major downtrend taking hold. What’s more, the broader argument for ongoing losses is looking stronger than ever,” says Matthew Ashley, a FX Research Analyst for Blackwell Global.
Ashley says AUD/USD could be exposed to further weakness should the neckline of the overarching chart pattern be broken over coming days, even in the absence of a major fundamental shift in sentiment.
Their analysis is based on technical factors but the fundamentals dictate that higher US interest rates and slower business activity in Australia will hurt the AUD.
4. http://www.forexconspiracyreport.com/be-careful-of-emerging-market-currencies/
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