By European optimism and the weaknesses in oil. Cost of production will be held back by both lower input costs (oil, immigrants, outsourcing, choice of techniques) and focused technological up-gradation. As USA picks up steam, there is bound to be a flow out of emerging economies in to US assets. With Brazilian and Venezuelan currencies in marked decline, there will be a flight to dollar assets and dollarization. It will impact other Latin American currencies too; and should in its sweep shake up the Asians too. Middle East markets would be affected by the nearly 30% fall in oil prices and markets like Dubai will again see pressures of sale.
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