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Politics : Ask Michael Burke

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To: Knighty Tin who wrote (30941)	8/11/1998 7:31:00 PM
From: Bob Rudd	Read Replies (1) of 132070

Taking a position in the trading partners and regional neighbors of a country with falling currency brings to mind one not so minor caveat: The devaluing country competes with these folks and the devaluation is tantamount to a giant price reduction by a competitor. Since the goods in these emerging markets tend to be price sensitive commodities, this impacts earnings of the companies and hence share prices. This is why Asian countries are selling off in anticipation of Chinese devaluation.

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