Rabobank: US and China heading for Cold War

Fed cuts will not be enough to sustain EM currencies while capital outflows continue as tensions persist

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Brazilian real: the only one of five EM currencies that Rabobank sees appreciating against the dollar

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Expected interest rate cuts by the US Federal Reserve are unlikely to prove sufficient to generate sustainable capital inflows into emerging markets (EM) and prop up their currencies so long as the US and China continue to be at loggerheads over trade, says Piotr Matys, an emerging market FX strategist at Rabobank.

“With the US and China hardening their positions, it is difficult to be optimistic that President

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