Over the last 1,3 and 5 years, Emerging Asia currencies have displayed resilience when compared to Emerging Market counterparts.
This strength is not by chance rather it is a result that of the multitude of positive changes since the Asian Financial Crisis of 1997. Asia governments have deepened their capital markets, spent more prudently and addressed their trade imbalances So much so, that on average, Emerging Asia is currently a global net lender as opposed to their Emerging Non-Asia counterparts, as evidenced by their positive current account balance
Having large foreign exchange reserves also mean that in periods of heightened uncertainty, Asian governments have the ability to instill confidence in their markets which results in less volatility of the currency.
The Bottom Line
The J.P Morgan Emerging Market Currency Index is a spot index of major Emerging Markets which include Brazil, Chile, China, Hungary, India, Mexico, Russia, Singapore, Turkey and South Africa.
Bloomberg JP Morgan Latin American Currency Index is a benchmark for monitoring Latin America’s currency markets on an aggregate basis. It is a spot index of Latin America’s most actively traded currency pairs valued against the U.S. dollar. The index's composition is based primarily on trade weights, with an added filter for liquidity.
The Bloomberg JP Morgan Asia Currency Index is a benchmark for monitoring Asia's currency markets on an aggregate basis. It is a spot index of emerging Asia's most actively traded currency pairs valued against the U.S. dollar. The index's composition is based primarily on trade weights, with an added filter for liquidity.
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