What are the currencies of the world a better buy in the fall of dollar and euro?

The first half of 2011 to become the global currency market in many ways unique. Since the introduction of the euro traders have become accustomed to the changes in world politics immediately reflected in the euro / dollar - the most popular currency pair of the world. But now the United States with the euro area as if it began to compete to see who of them will bring the world economy more problems. As a result, investors began to invest in the less popular currencies. ' feed. Roux ' decided to see what the currency of the world from the most reliable numbers have grown over the last year.

The dollar and the euro may be called the main losers of the currency market in recent months: they fell to almost all major currencies of the world. At the same time it is obvious that their value for the market remains extremely high, and if the global economy once again shows signs of a global recession, it is in the dollar, investors in large numbers will be looking for protection from the crisis - simply because the more reliable tool in the market is not.

But this does not mean that investors are not currently experimenting with currencies and do not try to find a ' safe haven ' in which to ride out the storm.

Too high a rate of national currency of the country 's economy brings enormous damage (which is why devaluation is usually because a beneficial effect on GDP growth ). First of all, suffer from exporters, who will get the profit in dollars and euros, and the losses are - in national currency. In addition, the high rate of influx promotes imports, local production become less competitive. At the same time for the citizens of the country's high rate of national currency is rather good - travel abroad and imported goods expensive for them to become much more accessible.

Obviously, it would be impossible to wait out the storm in the developing world, so this text will be devoted exclusively to currencies of developed countries. It should be noted that in the past year, emerging-market currencies also rose in price. For example, the Russian ruble per year ( August 5, 2010 to August 5, 2011 ) went up 7.78 percent at once against the dollar. This means that the actual investment in the Russian rubles for the Americans were more profitable market average deposits. However, the ruble against the euro fell even slightly - within 0.5 percent.

In Brazil, a local real dollar rose immediately to 11 percent and the euro - at 2.86 percent. It was Brazil in September 2009 announced that the world is ' currency war ', and occasionally reminiscent of the main players in the foreign exchange market, which is not good way to increase the value of currencies in developing countries.

However, in a real crisis on the real ruble or can not count. Everyone remembers the ' soft devaluation ' in Russia, which lasted from autumn 2008 to the end of January 2009, when the dollar on the MICEX increased from 24 to 36 rubles. In Brazil, the devaluation was not so serious, but still real in September 2008 to the end of February 2009, fell in price by more than 30 percent.

Because of this dramatic change emerging currencies are considered by investors around the world, not as ' quiet harbor ', but as tools for speculation. A more stable currency are in Western Europe and Asia.

Asia.

In Asia, there is a currency trading volumes that can be used to compare with the volume of trading on the euro / dollar. The high cost of the yen - have not any news for the global market, nor to local economists, the country with the third-largest economy in the world all of the 2000s with varying success struggled with deflation. Against this background, the yen rose in price gradually: in 2007 dollars was estimated to more than 120 yen, by 2010 - is less than 90.

Unexpected effect on the currency market has had an earthquake in March 2011. Usually at such events investors out of the currency of the country where the crash occurred, but this time the opposite happened anyway. The fact that the Japanese began en masse to sell their foreign exchange assets to restore the country's economy. As a result, the market there was a shortage of currency, because of which the yen has again started to rise in price. This, in turn, has hit exporters - in early 2011 they were reported as one or the fall of profits, if any, for damages.
A week after the earthquake, local authorities, it became clear that, if allowed to continue to strengthen the yen, the country's economy may face a renewed threat of recession. As a result, Japan was able to lobby together with other countries ' big seven ' yen currency intervention. This gave the short-term effect, if March 17 to the dollar gave 76.25 yen (which is a historical low), the March 18 - more than 81 yen.
Schedule a pair of Japanese yen - U.S. dollar, a website Google Finance ( click to enlarge).

However, the summer effect of this action is completely exhausted. August 1 dollar closed at below 77 yen. As a result, the Bank of Japan once again had to resort to intervention: however, this time not with the ' Seven ', and it alone. According to Reuters, the market was thrown a trillion yen, that is 12.6 billion dollars. This allowed the dollar to bounce back to the area of ​​79 yen.



However, for the year to August 5, 2010 to August 4, 2011 the yen against the dollar has risen by 9.3 per cent. It is likely that the forward movement of the yen will continue upward, and the intervention of the Central Bank of Japan will affect the market for less and less - the more so as the permanent interference of the Central Bank is unlikely investors will.

In Asia, however, there are other currencies that can compete with a yen for yield. Thus, the Singapore dollar and South Korean won rose for the year against the U.S. currency by more than 11 percent.

On these two economies - Singapore and South Korea - Russia is traditionally written and said is not very much. Nevertheless, most economists have long included them in the developed and developing countries are not. Their economies are not built on the export of raw materials and the production of high-tech products on the principles of open market and it attracts a large number of investments.

Singapore, in this sense is a bit stronger in South Korea. Over the last decade it has become a real financial center of Asia. The local currency, Singapore dollars, proved to be extremely resistant to the financial crisis in 2008 ( six months from September 2008, they sank only seven percent ). True, the country is in debt: Singapore budget expenditures exceed revenues, and debt - 100 percent of GDP. And yet, in the near future, at least until calm down the debt crisis in Europe, investors are unlikely to pay too much attention to this.

Europe.

In Europe, in addition to the euro, there are two major currencies: British pound and Swiss franc. The cost of a pound a considerable extent, and with the dollar (United Kingdom was the main victim of the financial crisis in the EU because of the economic proximity to the U.S.), and with the euro because the euro area are a number of trade partners.

As a result, Britain is experiencing all the same difficulties that the U.S. and Europe. It does not give the British pound strengthened: in the last year he rose to the dollar in less than four percent, while the euro - fell to 4.13 percent.
It is quite another thing - the Swiss franc. One of the most reliable European currencies during the year grew against the euro almost a quarter, and the dollar - and at 35 percent. By early August, the franc has updated the historical highs of both world currencies. After that, local authorities have decided that they have enough, and began looking for a way to reduce pressure on the franc. The measures were designed traditional: the Swiss central bank entered the market with the intervention, and base rates in the local economy has been reduced to almost zero. As in the case of the yen is likely this will be only a temporary effect: the development of financial institutions in Switzerland and the tax laws in the country attracting hundreds of foreign companies that do not allow you to doubt the reliability of the investment in Franks.



Schedule a pair of Swiss franc - U.S. dollar, from the site Google Finance ( click to enlarge).

There are in Europe and the less visible the currency in which, however, unlikely to invest less safe than in the Franc. Thus, in post-crisis Europe, one of the drivers of the entire EU economy unexpectedly for many has become Sweden. In late July, the country is once again surprised analysts by showing GDP growth from quarter to quarter by 1 percent. In 2010, Sweden 's economy grew by 5.7 percent, which was a record result for the EU - although in this alliance is full of developing countries, which in other circumstances, would show much more rapid growth.

With this increase in GDP Sweden remains one of the safest countries in the European Union. At the time, the Swedes decided in a referendum that they do not need to join the eurozone, and now they are virtually exempt from the need to invest in the salvation of Greece, Portugal and other countries in Southern Europe.

During the year Swedish krona against the dollar has risen more than 11 percent against the euro - by 2.5 percent. A similar situation exists in Norway - local koruna strengthened against the euro by 2.2 percent against the dollar - up 10.8 percent. Investments in Sweden seem to be more promising, simply because its economy is more Norwegian.




If we generalize the above, we find that now virtually all currencies ' second tier ' look much more favorable for investment than dollars and euros. In addition, a number of currencies with a high probability for a long time will not deviate from the planned course.
Alexander Polivanov.