Which currencies will strengthen the most against the USD and the Yen in an inflation environment?
Best Answer
825 points
Dragonsbane answered one year ago …
The answer to your question actually depends on your definition of inflation. Which can be used to describe an increase in money supply (and credit) or more commonly used to describe an increase in prices. If you are referring to the latter (which I think you are), the currencies that would appreciate most are those of countries that are large producers of hard (and to some extent soft) commodities. You may want to further narrow that down further to countries that also have a current account surplus which tend to better in times of economic distress. Such currencies would include CAD, AUD and BRL. However you would need a long term perspective to buy a currency only on the basis of price inflation alone.
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3963 points
MNSL answered one year ago …
I think Chinese Yuan will strengthen against US dollar. There is a possibility that Swiss Franc also will strengthen against US Dollar.
In the meantime US Dollar will strengthen against other currencies such as Yen, NZD, Euro, GBP and other soft currencies including Indian rupee.
A strengthened yuan helps stabilize the trade deficit between the U.S. and China. This make U.S. exports more competitive with Chinese goods in their home market.
It also gives American exports an edge against those from the European Union and Japan
because the yuan is not similarly rising against the euro or the yen. U.S. Machinery, chemicals, scientific equipment, environmental equipment, meat and grains will benefit the most.
