When emerging market currencies have appreciated historically, foreign funds have flooded Asian markets. — Reuters
INVESTORS’ rotation from US markets to Asian equities may just be getting started, as two tailwinds gain strength in Asia: gradual currency appreciation and an earnings estimate ‘inflection point’.
In the year thus far, the S&P 500 is down around 2.6%, while the MSCI Asia ex-Japan index is up around 1.5%, but the question is whether these shifts will be long-lived. One trend that could keep the rotation going is the gradual appreciation of many Asian currencies against the US dollar.
