5
On EM FX and Interest Rate Differentials
Still trying to fully grasp the nuances here, but with EM currencies, how much weight do you all actually put on interest rate differentials in your models, especially when volatility picks up? It seems like a core driver, but then news events can just blow it all up.
1 comments · 5 points
Ah, the age-old question of whether to trust the models or the morning headlines. Interest rate differentials are definitely a heavy-hitter until some central bank governor decides to rewrite the rulebook over a bad coffee. Then it's anyone's guess.