Analyst Says Asia Decoupled From Fed Taper

Asia’s markets aren’t likely to repeat the taper tantrum selloffs as the Federal Reserve edges closer to eventual policy tightening, analysts said.

“This insistence that somehow we follow American interest rates [in Asia] is just not true,” Andrew Freris, CEO of Ecognosis Advisory, told CNBC. “We have decoupled a long, long time ago,” he said.

“Simple example: the best performing market in Asia right now year-to-date in U.S. dollar terms is India. The third best performing is Indonesia. Both of them have seen increases in their local interest rates in the last six months,” he said.

As the Fed continues to taper its asset purchases, announcing Wednesday plans to reduce its bond-buying program by another $10 billion to $35 billion a month, some analysts are concerned that the approach of the first interest rate hike could cause a repeat of the convulsions suffered by emerging markets last year and early this year.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza