Thursday, August 07, 2008

Emerging Market Currencies under Pressure

Latin American currencies are feeling the pressure as the “Big Dollar” continues to gain ground. The dollar has been gaining steadily against Ars, Brl and Mexico over recent sessions. The markets generally feel nervous as yield players seem are getting squeezed. Liquidity is also extremely thin as it seems traders are away on vacation.

Mexico Consumer Prices has come out at .56 (expected .52) with the core number coming in at .4% exactly as expected. These numbers should allow for another rate rise on Aug 15 as Inflation is the main driver for rates in the country currently.

Continue to look for interest rate differesntials to widen.

God Luck and Good Currency Trading.



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