Yuan, Lira Cheapest in EM FX Screen That Has Preceded Past Gains
- Thai baht, Indonesian rupiah, Taiwan dollar score as expensive
- Undervalued EM FX preceded higher frequency of gains vs dollar
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For a currency investor looking for value in emerging markets, it might be best to avoid some of the top performers, and seek out the more neglected names.
Currencies ranked as cheapest on a monthly real effective exchange rate basis tend to show positive returns against the dollar more frequently than peers over the following year, according to a Bloomberg analysis. China’s yuan, the Chilean peso and the Turkish lira currently fall into that category, while the Thai baht, Indonesian rupiah and Indian rupee -- among the best-performing EM currencies over the past 12 months -- screen as expensive.