Trade war shaping up to be a major risk to emerging markets
Fund investors’ shift to ‘safe havens’ is detrimental to emerging-market currencies such as the rand, says FXTM expert Jameel Ahmad
The ongoing US-China trade war could be the biggest risk to global financial markets since the global economic crisis, says Jameel Ahmad, global head of currency strategy and market research at foreign exchange broker FXTM. The trade tensions have fuelled pessimism about the global economy, with fund investors fleeing so-called risky assets in favour of “safe havens” such as gold. The move, according to Ahmad, is detrimental to emerging-market currencies such as the rand. FXTM, which has its headquarters in Cyprus and offices in China, India, Indonesia, Malaysia, Nigeria, SA, South Korea and Thailand, provides international brokerage services. “The trade wars are a massive negative for emerging markets because emerging markets are so reliant on trade. The probable weakening in global trade is the biggest risk facing emerging markets right now. Its bad news, especially for an economy in a recession like SA’s,” he said on Tuesday. He said the tense relations between the US and China h...
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