| China Currency Devaluation is Awful News for These ETFs | |
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Just when you thought emerging markets were back on track, China decided to roil markets with a surprise currency devaluation. The country allowed its currency, the renminbi, to depreciate by about 2% against the dollar in the first round, and then followed this up with a bit more in the following day too. While this isn’t a huge move by most standards, it is actually one of the biggest for China’s currency against the dollar in decades.
This sudden move also put global markets into a tough spot as it sent stocks around the world lower, while it also pushed Treasury bond yields south as well. And while it pushed American markets into the red, it truly had an awful impact on key markets in the Asia-Pacific region (see all the ETFs in the Asia-Pacific (developed) category).
Hardest Hit
Neighbors of China have become very dependent on the massive emerging market for growth, so a devaluation can hurt in multiple ways. First, it makes China more competitive on the world stage for exports, hurting countries that also have big manufacturing operations. Additionally, the devaluation makes it more difficult for Chinese consumers to buy foreign goods hurting economies that sell goods to the China market (see all the top ranked ETFs here).
Among the hardest hit include Korea (EWY), Australia (EWA), and a host of Southeast Asian economies like Indonesia (EIDO) and Malaysia (EWM). Australia is more impacted by the commodity situation, while Korea and Malaysia in terms of tourism and general trade, and then Indonesia from a competitive standpoint for cheap labor (but also commodities as well).
More info
The China currency devaluation is a big story and it is likely to reverberate across the region. But if you are looking for more on this topic as well as some of the ETFs and countries mentioned above, make sure to watch our short video below:
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report ISHARS-S KOREA (EWY): ETF Research Reports ISHARS-AUSTRAL (EWA): ETF Research Reports ISHARS-MALAYSIA (EWM): ETF Research Reports ISHARS-MS INDON (EIDO): ETF Research Reports To read this article on Zacks.com click here. Zacks Investment Research Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
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. Ishare MSCI Australia is listed in United States of America. Its market capitalisation is US$ 2.0 billions as of today (€ 1.9 billions). Its stock quote reached its highest recent level on November 02, 2007 at US$ 34.83, and its lowest recent point on March 13, 2009 at US$ 10.50. Ishare MSCI Australia has 85 200 000 shares outstanding. |