Contrary to popular belief, equity markets in countries experiencing currency weakness are more likely to outperform than those in strong currency environments.
These surprising conclusions are the result of a joint study conducted by ABN Amro and the London Business School. The study looked at data from 53 countries going back to 1900.
The exchange rate has two countervailing effects on equity markets. On the one hand a weak domestic currency is generally assumed to increase corporate earnings because it boosts export competitiveness. When the UK was...
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