1. Newsroom
  2. EM currencies in the wake of the coronavirus
Menu
Insight 17.02.2020

EM currencies in the wake of the coronavirus

EM currencies in the wake of the coronavirus

Since the beginning of the year, most emerging market currencies have registered losses against the USD.



Consensus expectations at the start of January were broadly constructive for risky assets and for emerging markets. Economists and investors expected a combination of increased fiscal spending and a modest rebound in industrial production, reflecting the US–China trade deal.

However, the effects of the Coronavirus outbreak have been unambiguously negative for most Asian currencies and will have a significant effect on global growth. Consequently, oil prices have declined, which poses problems for oil-producing emerging market economies and currencies. The decline in the oil price also suggests that regional inflation risks are now on the downside, meaning that emerging countries’ central banks can either maintain their currently loose stance or ease policy even further in the months ahead.

There are some exceptions to this broad trend. Emerging market currencies with high real interest rates and strong current account surpluses have performed well and will continue to do so. Our EM macro and FX Strategist Koon Chow and our Global Head of Forex Strategy Peter Kinsella discuss these recent developments and the outlook for the coming months.

Our expertise

Peter_Kinsella_150x150.jpg
Peter Kinsella
Global Head of Forex Strategy

CHOW_Koon_150x150.jpg
Koon Chow
EM Macro and FX Strategist

Expertise

Agility: at the heart of our discretionary management

Your goals and aspirations are unique – so is our approach to discretionary portfolio management.

Read more
Expertise

Swiss & Global Equities

Why Swiss equities now? This market offers equity investors the stability and agility they need to navigate this volatile period. 

Read more
Expertise

European Equities

European equities offer unrivalled opportunities in terms of breadth of sector and market exposure.

Read more

Most read

Insight 10.02.2021

COVID-19: UBP keeps you up to date

Since this coronavirus appeared, UBP has provided its clients with guidance and support as we all tackle this unprecedented global health crisis. We give you regular updates on everything from our own safety protocols and the recommendations issued by the authorities to our experts’ latest analysis on the effects of the pandemic on the world economy and financial markets.

Insight 17.12.2020

UBP Investment Outlook 2021

A Brave New World

Insight 24.11.2020

Hidden gems in Swiss & European small caps

Small and mid caps have traditionally recorded higher growth rates and investment returns over the long term than large caps: it is easier to generate a dynamic growth rate from a smaller base. Swiss and European small and medium-sized capitalisations – so-called ‘SMID caps’ – also tend to provide investors with ‘pure play’ exposure to major secular growth trends.


Further reading

Insight 06.05.2021

Why the Japanese market is performing well again

Japan’s equity markets have outpaced other major developed market equities in both 2020 and year-to-date in 2021 as the world seeks to transition to a post-pandemic recovery.

Insight 04.05.2021

Positive performance defies volatile markets

The first quarter of 2021 was positive for most asset classes. However, financial markets were far from calm.

Insight 29.04.2021

A defining moment for companies tackling climate change

The year 2021 may well turn out to be decisive for climate action.