Punished by the strong U.S. dollar, some developing markets are rushing to pare interest rates in advance of the Federal Reserve boosting U.S. rates. Weighing on the emerging markets space, the U.S. dollar has been slowly appreciating against a basket of foreign currencies on the prospect of a higher U.S. interest rate, reports Patti Domm for CNBC. The WisdomTree Emerging Currency Strategy Fund (NYSEArca: CEW) is off 3.7% this year. The Thai baht is the second-largest holding in CEW at nearly 7% of the ETF’s weight.
Thai stocks could also be supported by the country’s Social Security Office’s bid to up its equity positions while trimming its holdings of sovereign debt. “The fund has overweight holdings on commerce, telecommunication and health-care companies as they’re less affected by energy prices and slower global growth,” according to Bloomberg.
Telecommunications, health care and consumer sectors combine for about a quarter of THD’s weight. [Solid Start to new Year for the Thailand ETF]
iShares MSCI Thailand Capped ETF