The Strategist

Goldman Sachs sees potential in Mexican Peso, South African Rand and Russian Ruble

09/28/2020 - 03:32

Analysts of the American investment bank Goldman Sachs saw "good opportunities and potential" in the currencies of some emerging countries, reports CNBC.

 As the bank's analysts noted, "it may be too early to bet on the currencies of developing countries with a high level of risk and high potential yield, but it is not too early to properly consider the possibilities of such assets when the current crisis calms down."

The bank gave the highest rating to the chances of the Mexican peso: after the "dust" associated with the coronavirus pandemic and the growth of the dollar "settles", the currency may become one of the "safe haven assets" for investors. 

GS Global Currency Markets Co-Director Kamakshya Trivedi also noted that in addition to the Mexican peso, they are very closely watching currencies such as the South African rand and the Russian ruble.

These currencies, which have fallen in price, attracted the attention of the analysts due to their potential attractiveness for carry trade (making a profit due to different interest rates in different countries). 

At the same time, analysts note that a lot for the peso, rand and ruble will depend on the development of the situation in international markets in the near future, this will have a direct impact on the macroeconomic prospects of these countries and, as a consequence, on the attractiveness of these currencies.