Recently, as the United States Federal Reserve has looked into cutting interest rates, experts are suggesting that investors look into emerging currencies instead.
In fact, lessening interest in the American dollar may lead to higher buy-ins with currencies across the world, many in developing nations.
However, Chief Investment Officer for the Americas at UBS Global Wealth Management recently attested that these trends do not signal an overall decrease in the dollar’s worth, despite stating that “We do think there is a basket of emerging market currencies that look appealing as the Fed is poised now to begin cutting rates as opposed to raising rates.”
The concept “carry trade” has come into play in that investors have begun to increase assets in currencies with higher rates while using currencies with lower rates to do so in order to earn more while ultimately paying less.
Currencies in nations such as India and Indonesia have peaked interests in many investors, as interest rates in both countries sit around 6%.