The ongoing decline in U.S. real interest rates suggests that EM currencies should continue to outperform in total return terms, and we remain bullish on the WisdomTree Emerging Currency ETF. After turning bullish on April 2 the index has risen 7% and we believe the rally may be just getting started given the strong gains seen in…
We remain bullish on the WisdomTree Emerging Currency ETF which we entered on April 2 owing to the elevated level of real and nominal yield spreads and cheap valuations. Even after a slight decline in EM real yield spreads, the average real yield in the CEW basket exceeds the U.S. by almost 5 percentage points.…
We published a bullish view on Emerging Market FX today on Seeking Alpha. Below are some excerpts: The CEW WisdomTree Emerging Currency ETF is at its weakest level since 2000 in real terms. The EM FX basket has weakened despite a surge in real and nominal interest rate differentials suggesting that the risk premium…
Intro: High inflation is a common feature of emerging markets. Even when real GDP growth is positive and monetary and fiscal policies are prudent, the lack of willingness to hold local currency as a store of wealth typically results in higher inflation rates relative to developed markets. As explained in Strong Growth and Low Unemployment are…