Global Macro Service > Research Briefings > Global
In our recent extended panel assessment on EM FX, we found most currencies have yet to recover ‘fair value’ after the March 2020 overshooting event. Estimates considered; regional stories emerge.In Latin America, massive political noise has been a key ingredient for larger FX discounts. Meanwhile, EMEIA currency misalignments are mixed, with forecasts consistent with fundamentals continuing to improve in the near future.Our FX valuation model produces common elasticities for 15 EM economies. Model residuals are interpreted as misalignments, decoupled from key economic fundamentals controlled by high-frequency variables.
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