Thursday, 6 March 2014

Goldman Reversal Mirrors Rupee’s Trade Improvement: Currencies

Firms from Goldman Sachs Group Inc. to Deutsche Bank AG are putting their faith in India’s rupee as the country looks forward to the biggest improvement in its broadest measure of trade in a decade.

Goldman Sachs, which ranked India as the most vulnerable Asian market in September, now predicts the rupee will beat peers from Brazil to South Africa and Turkey. Deutsche Bank, the largest foreign-exchange trader, and Barclays Plc say it’s their favorite emerging-market currency. The rupee has risen 6.2 percent against the dollar over the past six months, the most among 11 Asian currencies tracked by Bloomberg.

Investors are seeking safe, high-yielding assets as the U.S. Federal Reserve reduces stimulus and after a slowdown in China contributed to the worst start to a year for emerging-market currencies since 2009. For many, India fits the bill, as policy makers take steps to reverse a slump that sent the rupee tumbling to a record last August.

“India looks in much better shape now than it did six months back,” Kim Jin Ha, a global fixed-income fund manager in Seoul at Mirae Asset Management Co., which oversees about $59 billion, said by e-mail March 3. “Capital flows can continue.”


From bloomberg News

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