Emerging Markets lose the global growth driver status, EUR firmness ahead versus most EM FX

Jane Foley, Senior FX strategist for Rabobank, joined Zak Mir and Bill Hubard on the Tip TV Finance show to discuss the situation concerning emerging markets and the effects they are having on global growth and currencies.

Emerging markets suffer from China crash

When Mir mentioned the ECB announcing and non-farm payroll numbers being released in a few hours and tomorrow respectively, Foley instead noted emerging markets and their impact on global growth as having a significant effect in the current global economy. She outlined how China’s slowdown, along with Russia’s crisis last year and Brazil’s recession as underlying factors for a slowing rate of global growth, which the World Bank recently revised down.

India will continue to expand but has its issues

Foley continued onto India, which is experiencing growth, but she added that despite being a bright spark in the world at the moment, the new government has been lackluster in introducing structural reforms which are very much needed.

Whilst discussing India, Foley noted one of the central banks which urged the Fed to raise rates at last weekend’s central bank meeting was India.

She concluded that emerging markets are no longer the engine which drives global growth as they were in recent years.

EUR to be firmer

Foley outlined how there could still be traction to get the Euro down, which Hubard then commented had been reflected in the EUR/USD. Foley expressed her belief that the markets are still settling down, and then the Euro will be a lot firmer against most emerging market currencies.