For more than a year now, commodity prices have been under pressure from the strong U.S. dollar and slowing global demand. This has made a huge dent in the balance sheet of many net exporters of resources, in turn weakening their currencies.
With a plethora of major central bank announcements out of the G10 this week, traders will be more focused on developed markets than their emerging market rivals, so we wanted to take a moment to reset the technical outlooks for the major EM pairs we follow.
Thousands of gallons of virtual ink has been spilled on the market implications of the Federal Reserve’s monetary policy meeting decision on Thursday, and we’ll undoubtedly see plenty more analysis over the next few days.
In last week’s EM Rundown we explored which EM currencies were most vulnerable to a potential Grexit, and while a Greek exit from the Eurozone looks more likely than ever, there is a much bigger risk for EM FX emanating from China, whose economy is roughly 40 times larger than that of Greece.