Cautiously optimistic on EM currencies

Global foreign exchange markets remain caught between weakening global growth expectations and policy response. Judging by leading global indicators, economic momentum has clearly stalled. The highly synchronised nature of the slowdowns in the US, Europe and Asia is of particular concern to global investors.

In the US, the ongoing deleveraging process, together with the hit to consumption from higher oil prices, have impinged on economic activity, resulting in a similar seasonal economic pattern