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Fasdal: Currency crisis offers opportunities and here's why

Currencies in emerging markets have been weakening, prompting fears of a wider sell-off in bonds and equities. Saxo's Simon Fasdal says the reason for the panic is a combination of concerns about a US Federal Reserve rate hike and pessimistic outlooks for many EMs.

He warns that there could be a knock-on effect in European bonds and stocks, as well as the US equity market. But Simon thinks that if there is rate hike soon, the Fed will be extremely dovish.

That could open up opportunities in the bond markets, he says, including emerging markets such as Mexico, India and Brazil. He also believes the euro will strengthen which could encourage the European Central Bank to build what he calls a 'QE2' version. If this happens, Simon says investors should look to European corporate bonds and the high yield sector.

03:28 minutes
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