EM currencies gain as growth returns, but boom unlikely
Emerging market currencies tend to move with the economic cycle. Consequently, after losing ground in 2020, they have recently shown signs of recovery. While growth should support EM currencies during 2021, other currently positive factors may wane. We therefore think an EM currency boom is unlikely unless world growth and inflation surprise markedly to the upside.
What you will learn from this report:
- An index of EM currencies fell 5% in 2020, but a deeper fall might have been expected given the slump in world GDP.
- The pro-cyclical nature of EM currencies appears to be behind notable gains by some in recent months.
- Our EM FX barometer is currently positive for EM currencies.
Inflation – not past the peak and easing will be gradual for France
France has dodged soaring price pressures better than its eurozone peers, but we think its inflation will fall more slowly.Find Out More
Answering the questions in our US forecasters’ inbox
In this new quarterly Research Briefing series, we answer the top five questions we've recently received from clients.Find Out More