The so-called train may have left the station a decade ago, but investors that missed that ride are still clamoring to invest in emerging market economies because, put quite simply, that is where the growth is. Every CEO has confirmed this fact during their quarterly earning conference calls for the past year. Resources must be devoted to developing Asian markets and their prospering middle-class consumers, while domestic hiring plans are put on hold.
If investing in these markets is prudent, then it may also be wise to invest in the native currencies for the long term. Many of these currencies have been “pegged” to the U.S. Dollar or a basket of currencies, and therefore, a common forex trading platform cannot easily aid in the purchase of them, but over time, government officials will have to let these currencies float, if only to quell inflationary pressures at home.
The “Yuan”, or “Renmenbi” as it is often called, is China’s national currency. Backed by foreign exchange reserves in excess of $2.4 trillion and an industrial growth curve that will make China the world’s economic leader by 2020, the value of this currency can only go up. Buying it is difficult, as with other emerging market currencies, but there are ETFs that have been created just for this purpose.
The “CEW” is but one of the many new offerings in the past few years to facilitate owning emerging market currencies on a diversified basis. The chart above indicates an upward trend for all of last year, and the technical indicator on the bottom of the chart, the “Slow Stochastic”, has consistently signaled appropriate overbought and oversold conditions for those favoring a trader’s mentality.
Economists project emerging market growth trends to continue to 2030. Currencies will follow.
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9. May 2011 at 11:16 am
Obviously this is about Jim Rogers,but what invlovement does he have other than being the subject of it?