ETF Trends
ETF Trends

Collapse in overseas demand has created a precarious situation in the export-heavy Central European region, and the ensuing financing problems have been reflected in the regions currencies, along with related exchange traded funds (ETFs).

Central European currencies increased after statements made by policymakers in supporting their currencies, write Jan Lopatka and Krisztina Than for Guardian. Central bankers provided announcements that the recent currency drops were overplayed and did not reflect the economic reality.

The short-lived currency gains fell back after investors realized that verbal interventions were not enough to justify strength.

The region’s policy makers may be forced to sacrifice growth by increasing their interest rates to maintain currency rates, reports Michael Patterson and Laura Cochrane for Bloomberg. Hungary may boost borrowing costs by 0.5% to 10%, the Czech Republic is predicted to raise rates by 0.25% to 2.0%, and it is thought that Poland may reduce rates by 0.25% to 4.0%.

By raising interest rates, they are boosting their own currencies along with preventing foreign debt payments from rising at the expense of a self-inflicted maiming of their economies.

WisdomTree was supposed to launch an emerging currency fund (CEW) last year, but it hasn’t launched just yet. The fund provider has a number of currency ETFs in the pipeline, many of which aren’t backed by an ETF in the United States.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.