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Strategies & Market Trends : Currencies and the Global Capital Markets -- Ignore unavailable to you. Want to Upgrade?


To: Chip McVickar who wrote (240)6/23/1998 9:27:00 AM
From: Amelia Carhartt  Read Replies (2) | Respond to of 3536
 
Chip:

I notice that my international bond funds are not doing too well. Is this because rates are rising around the world? Assuming that's true at what point do investors start pursuing yield as opposed to appreciation? Is there a rate below which the "flight to safety" breaks down?



To: Chip McVickar who wrote (240)6/23/1998 9:48:00 AM
From: Henry Volquardsen  Respond to of 3536
 
Chip,
Rates in South Africa have been volatile recently. They are back up a bit today but they have been higher. I have seen aggressive interest rate policy work successfully in defending a currency but I have also seen it fail. It all depends on how sound the underlying fundamentals are. In the case of South Africa I suspect they will eventually break but it will be a question of wether they go for a step function move or a gradual managed decline.
Henry