Which Way for Emerging Markets in 2017?
The prevailing economic forecast for 2017 predicts that, under President-elect Donald Trump’s incoming administration, the US will expand its fiscal-stimulus policies, the dollar will strengthen, and emerging markets will suffer. But there are four reasons to doubt the conventional wisdom.
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LONDON – Casual observers might think that 2016 was a disappointing year for so-called emerging markets. In fact, some of these countries have delivered the year’s best investment returns, while certain developed-country markets have fared poorly. If a United Kingdom resident who has personal obligations in Brazil had hedged all of his Brazilian real into sterling at the start of the year, he would have lost almost 50% of his investment.