He added that the Asian giant still faces a difficult external environment, which could hit Chinese exports further, while a trade deal with the U.S. would be “more a ceasefire than lasting peace.”
“The major theme, for me, for this year is not a synchronized slowdown. Synchronized slowdown suggests that countries feed onto each other and the whole thing starts coming down in a violent fashion,” the economic advisor said.
Rather, El-Erian said, “the major theme is divergence.”
From an investment perspective, foreign-exchange markets, especially, would find it challenging to navigate such a trend, he added.
While some experts have predicted that the U.S. dollar would weaken or stabilize in the coming months, El-Erian said the greenback could “appreciate further from here.” That will put pressure on emerging market currencies and hit companies that borrow in U.S. dollars but generate much of their revenue in their local currencies, he explained.
from Viral News Reports http://bit.ly/2UMPO2r
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