Sara Zervos of Oppenheimer told Bloomberg investors should favor the Mexican peso, South Korean won and Indian rupee, while avoiding the South African rand, Brazilian real and Indonesian rupiah. The rupiah was the worst emerging currency in the world last year while the won could be vulnerable to interest rate cuts by the Bank of Korea.
Stung by a weak yen, South Korea could move to weaken the won to keep its exporters competitive with their Japanese rivals. The won, peso and rupee combine for nearly 21 of the WisdomTree Emerging Currency Fund (NYSEArca: CEW). The rand, real and rupiah combine for just over 19% of CEW’s weight.
WisdomTree Emerging Currency Fund
ETF Trends editorial team contributed to this post. Tom Lydon’s clients own shares of EEM and EMB.