Technical Strategy and Economic Research by Lloyds TSB

The expected rally in base metals and soft commodities together with the rebound in equities promoted risk attraction strategies and favoured the bullish view of emerging market currencies.

Latin America and Central America:

The expected rally in base metals and soft commodities together with the rebound in equities promoted risk attraction strategies and favoured the bullish view of emerging market currencies. Whilst the BRL and CLP were the favoured currencies, the optimistic wave has seen a broad rally in emerging markets. Although a near term correction is favoured, the outlook remains supportive over the coming months.

Asia/Asean:

The positive outlook for the KRW continues with prospects for a major topping formation. Under performance of he THB was expected, but this should now regain some lost ground both regionally and against the dollar. The INR was stronger than anticipated and has breached key support at 50.00. The Chinese stock market has led the global equity rally, but Asian stocks continue to look attractive from a medium to long term persective, under pinning the
bullish outlook.

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