Economic Update
Currency Outlook (Nov 09) |
| A taxing time for currencies Recent measures from Brazil and Taiwan aiming to curb capital inflows send a clear signal: EM policymakers are resisting a sustained reallocation of portfolio capital from the West and the domestic liquidity and currency implications which go with that. We look across EM to see which countries may be the next to act. G20 FX policies – Each to his own Although the US current account deficit may well continue to shrink, the dollar is likely to stay under downward pressure. This will put the FX policies of the ‘interveners’ in G20 under increasing pressure. ZAR – A diamond in the rough South Africa appears to be reluctant to face reality. The world is hunting for real tangible assets. As a result we are seeing the Dutch disease spread its misery throughout the South African economy. South Africa will need to readjust to the new world order and intervention to slow the ZAR’s rise can only buy time. To download the full report on Currency Outlook, please click here A copy of November 2009 HSBC Market Forecasts can be found here. |
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