Hasnain Malik Strategy and Head of Equity Research
August 6 2019
China deval vs Asia peers; the trade war's latest salvo
Following the devaluation of over 1% in China's FX rate, we reiterate our view that in the near-term the damage from US-China friction – of which the trade war is one component and where this devaluation likely signals low expectations from the Chinese side of meaningful progress in negotiations – is negative for all markets in frontier and small emerging. Longer-term, there may be a silver lining for rival low-cost manufacturing exporters such as Bangladesh and Vietnam. Below we present three charts that illustrate the change in the FX rate of China compared to Asian peers...
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