FX measures the health of an economy relative to its trading peers. At Houghton Street Partners we have studied the history of currency depreciations in Asia. FX is a double-edged sword and can move investment returns by as much as 10% especially in emerging Asia. We have developed a back-tested country weakness matrix that serves to predict currency depreciations. This matrix also helps us uncover emerging FX trends that help us boost investment returns.
Our proprietary FX analysis allows us to develop strategies to capitalize on FX flows such as through indirect hedging by investing in companies with revenues in foreign currencies, or through more direct means by using leverage denominated in the currency we believe will appreciate.
Correlation, Rating & Strength