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: Does currency weakness cause inflation or does inflation cause currency weakness? While it may appear that currency weakness causes inflation, the opposite is true. Declining export competitiveness and falling real interest rates resulting from higher inflation necessitate currency weakness. Contrary to economic theory, higher inflation prints can sometimes lead to short-term currency appreciation in…