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00:00Joining us now is Greg Gibbs from amplifying global ethics capital no doubt. Greg these are trying times for ethics watchers and traders like yourself because that long carry trade that has been the boon for so many is I guess long gone. So what does one do well you know it's been a pretty volatile time has been. You know I feel like we could come down here for a period. The Chinese stock market is falling all the way back to the middle of its reign since 2009 2014. So it feels to me the authorities there probably can start to stabilize that market with their policy easing and I'll probably do so so they'll see a bit of risk aversion come out of the market here in the short term we've already seen that started overnight with the balance in the U.S. stock market. So we'll see you know a bit of recovery in the Asian currencies here in the short term Asian equity markets. We'll probably see the dollar rebound a little bit against the yen and the euro as the market starts to think about some more quantitative easing potentially from you know Japan and the ECB plus policy easing more policy easing can come from China as well. So all that's going to calm things down a bit. But that said you know we really have gold through appeared here with the markets very concerned about growth in China about the financial system in China and those concerns aren't going away in a hurry. Well August 11th that was the day wasn't it. Does that shock move from China and for currency watchers and traders like yourself kind of like the canary in the coal mine that a lot of people said we saw this volatility in the currency markets then bled into equities as commodities to be sure. So what about those central bankers and other emerging markets that are now under pressure. I mean what do they do. You've got the China slowdown as you said on one hand Fed rate hike on the other yes I mean it's been I guess a few things which would have triggered the volatility and that movement in the Chinese currency was you know still a contributing factor. So I guess that means the policy makers there would be wary of letting the currency move again here in the short term. So I think that will continue to keep the currency fairly well contained while they try and contain the volatility in their equity market and try to prevent excessive capital outflows which certainly have been around now for over a year. Coming out of China so. But overall I mean economically it's in their benefits let their currency weaken. So you know as things calm down I think you will start to see the authorities in China you know gradually allow some further weakness in the Chinese currency and that's going to put downward pressure on Asian currencies again. So it feels like it's you know it's a short term corrective economy which because you know we've seen so much volatility and that's created a panic mood. So as the panic fades a bit we'll move back to a I guess a negative outlook for the Chinese currency and other currencies in the region as well . Well there's a little bit of a negative outlook you could say to say the least Malaysia ring it. We've got some panic I guess amongst policymakers and governing body there as they continue to see weakness in the ring it. They're looking at same strategies employed back in 1998. What do you think will stop the fall for the ring it. What does Malaysia need to do it is certainly a very very difficult situation. The government is in at the moment and you know it's really falling ise on two fronts. You've got very weak commodity prices and you know you know Malaysian ringgit I guess suffers from both its connections to growth in China and plus it's the commodity currency and plus it's got you know a corruption scandal flowing through its government and you know that's going to continue to be a big issue for the currency. Now is it cheap enough I guess is the question for to really drive capital back into Malaysia. And it's probably not. I can see a short term corrective move here but I think you know the mood around you know these big issues is going to continue to keep their currency under pressure. I haven't you know I mean I would hate to be in that situation will I introduce some kind of currency controls again. I suppose it's not out of the question you know if the currency worst certainly start to fall. It was burning through their effects reserves. You know I guess it's something I would consider but that would be very damaging for the longterm confidence as well so you know somewhat there. They're caught between a rock and a hard place all right. Very quickly before I let you go what do you think the healthiest currency right now in emerging markets is well it's the Indian rupee. I mean it had its big falls. You know back in 20 0 2011 2013 is proving much more stable at the moment it's its economic performance is one of the best in Asia it's less linked up to developments in China. It's got a credible central bank and a lot of a lot of hope for the new government. So I think overall you know you'd expect the Indian rupee to be one of the best performing in the region. Okay . Great observation there Greg Gibbs. Thank you so much for that and all of it really director amplifying global .

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India Rupee to Be One of 'Best Performers' in Asia

Greg Gibbs, director at Amplifying Global FX Capital, talks about emerging-market currencies including the Chinese yuan, Malaysian ringgit and Indian rupee. Gibbs also discusses China stocks and the nation's economy. He speaks with Angie Lau on Bloomberg Television's "First Up." (Source: Bloomberg)

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