What does the next year hold for emerging market currencies?

On Thursday 1 November, I took part in the third and final #IGForexChat, a live panel discussion hosted by spread betting and CFD provider IG. I joined financial market analyst Rajan Dhall and IG’S Victoria Scholar to discuss what the next year has in store for emerging market currencies.
You can watch the full interview or read a summary of what was covered below. Make sure you also head over to IG’s YouTube channel to view the other IG Forex Chats, which explore the effects of Brexit on forex markets and how a Trump-China trade war could impact forex markets.

Paul, from a technical perspective, is the Turkish lira something that you’ve been trading?

Paul Bratby: I’ve been trying to stay away from the lira due to its volatility. For me, I’m more of a conservative trader so I look for longer-term moves. The lira is just too sensitive to news and it can wipe out stops on your account if you’re not careful.

Following the recent upward trend, is the Brazilian real one to watch after the campaign of president-elect Bolsonaro?

Paul Bratby: Well I think the trend [a 5% rise against the US dollar in October 2018] is over now. Following the election, it has pulled back quite dramatically. The election acted as a catalyst but, all of a sudden, that bullish trend is over and we could be in a bearish correction.

Goldman Sachs predicts that the Chinese yuan will fall to the psychological seven-handle against the US dollar within six months. Do you believe that is correct?

Paul Bratby: Yes, I mean it could keep going higher but if it does come back down I think that the seven-handle will hold as support. I think we might have a small bearish correction right now. Trump’s got to back down a bit [in the trade war] so I mean these people have got to talk; they’ve got to try and sort a few things out.

Get more insights from the #IGForexChat

If you’d like to find out more about what the coming 12 months hold for emerging currency markets, watch the full interview, or choose an area that interests you:
• Is current emerging currency market volatility a warning sign or an opportunity?
• How do you handle the challenges of trading forex in a basket?
• Is the return to the US dollar responsible for the current volatility in the emerging currency market?
• How could the US midterms affect emerging market currencies in the coming months?
• What damage could a flattened US yield curve do to emerging market currencies?
• What are the troubles currently facing the Turkish lira?
• Can the Turkish central bank truly be independent?
• How viable is the Turkish lira as a forex trade?
• Is the Brazilian real one to watch out for following president-elect Bolsonaro’s electoral victory?
• Following a bailout, is the Argentinian peso in ‘reprieve mode’?