Asian currencies are in the news again as the best place to head if you are an FX trader. There are many reasons that Asian currencies are seen as a decent investment, at least for a few of them. Singapore is often something of interest to traders due to its position in the markets. It is an emerged nation, and although the currency is exotic it tends to have a better position than the South Korean won or Indian rupee. Yet, it is the rupee and Malaysian ringgit that have been gaining more interest in the last week. The yen has also gained recently for several reasons including its safe haven status against the USD.
What FX News is Saying about Asian Currencies
The talk in the USA is all about the Fed tapering. It has been for weeks and it is still continuing as many wait to see what is going to be said. One expert believes there are some specific concepts that will affect currencies in the FX market. It is these that are making Asian currencies more desirable for a little while.
India just received a bonus, if you want to call it that, of money. Their increase in money is designed to help promote growth. However, in March 2014 all the debt will come due, which is going to be an issue. There is also the potential of quantitative easing occurring earlier than anticipated which could directly affect the rupee’s gain on the increase in funds India received. Add in a little deleveraging to the issue and things can swing around in the FX market where Asian currencies are not where you want to be.
At least for the next few days, Asian currencies are going to seem more worthy of investments for a profit than even the USD. There are other factors at play in the market including the decision not to taper the stimulus. Many state they are not in a hurry now that GDP results and labour data are out. Both are not very flattering to the USD or USA economic stability. Tapering may occur as early as December, but more than likely the Fed will hang on until 2014.
FX Taking Experts’ Advice
From everything that can be seen in this last week of September, FX traders are taking experts seriously and getting into some of the emerging market Asian currencies. It will not last and nothing in forex is meant to. Every day will bring something different whether it is a political, current, or other type of event. No one is meant to hang on to a currency pair indefinitely. All that can be done is for the traders to look at what is good for today, see if it is just as good tomorrow, and then reassess as the market changes. The trade is in possibilities for FX, not what is going to happen in a month or in two weeks at least for most traders. Examining past moves and what is going to happen in the future is helpful, but not the entire picture.