 | |  | | KeymanFX-启明外汇:首席分析师观点
The Latin American currencies are performing well or poorly depending on your perspective. These currencies are stable to strong given the slowing of the US economy and the importance of this economic powerhouse to the Americas. The Brazilian real and Mexican peso have been unable to significantly surpass the highs of the past six months so they aren't too strong, but when you factor in the interest rate, they still provide a nice return. Equity markets are used as a predictor of future economic performance and in the US equities have been rising strongly since June. This upmove in the S&P has been very steady and this paints an optimistic picture for the future. Our models are quite positive on the BRL, but this is mainly due to a 6% interest rate advantage over the US in a world where yield is hard to find.
While the financial markets remain optimistic and equities are strengthening we favor holding long positions in the Latin American currencies. Although we aren't as positive on the economy, until there are signs of trouble we will stick with the trend. However, if the S&P falls below the strong support at 1400 then we will start to get nervous about the LatAm currencies. Our forecast calls for them to see mild weakness into next week and then turn higher into the middle of January. If the equity markets can keep their nerve during that period, then long BRL and MXN positive will be very profitable. |  |  |  |  |
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