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Fed rate hike vs Emerging market currency depreciation.

Right now financial market is facing the threat of rate hike in US. I think every nation has its right to protect their economy or making things better for their people, their industries e.t.c. This year currencies of Emerging nations have depreciated lot, like in Brazil, India & latest in China. Somewhere I saw that after yesterday’s devaluation China also depreciated their currencies today. Indian currencies also depreciated lot today in intra-day basis.

Today during trading hours I was really thinking is there any connection of these latest currency devaluations or depreciation with any imminent risk asset sell-off which authorities are sensing. I am not very much sure whether any sell-off is coming but some of the sectors like mining, industrial metals are giving brilliant buying opportunities. Few days ago I was talking to one of my friend from Brazil about Vale, it looks cheap but still I did not find strong voice from him about buying at this time. I think Brazilian market is giving better buying opportunity if you consider their currency depreciation; probably they need some political support.

India opened the route of PF funds to invest in stock market through etfs, that is very good sign. I think this type of step will increase the strength of our stock market as well as economy. As a matter of fact in future we may not have to depend on foreign institutions. I also suggest some entry & exit load for these foreign institutions.



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Comments

  1. The Euro to US Dollar conversion rate changes over at 1 EUR is 1.126 USD.

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