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Latin American Economic Growth
An indication of Latin American economic growth could be found today in the quarterly financial report of 3M. 3M is a global presence selling a wide range of products. 3M sales are often considered a good indicator of global economic health. The company’s breakdown of growth or contraction of sales by region is instructive. It indicates North American and Latin American economic growth as opposed to contraction in Europe and Asia. The short story of the 3M first quarter financial report is that sales in the USA went up 6.3% while sales in the rest of the Americas went up 8.4%. On the other hand sales fell 1.9% in the Asia/Pacific region and rose by only 0.1% in the East and Africa region that includes the Euro Zone. While United States manufacturing expands so does business and the middle class in Latin America. Latin American economic growth could well be the growth engine for the Americas in the decades to come. With this in mind Forex traders may wish to watch currencies such as the Mexican peso and Brazilian real for trading opportunities.
Latin American Economic Growth and Currencies
South America comprises over 380 million people in a dozen nations. One person in sixteen in the world lives in South America. When looking for the best currency pair to trade in Latin America one may be interested in high volume, liquidity, or volatility.
The two biggest contributors to Latin American economic growth are Mexico and Brazil. The countries with the largest fluctuation in currency rate versus the USD over the last few years are Argentina and Venezuela. The most rapidly growing country is also Argentina although Peru and Chile are growing in the six percent per year range. The fastest growing Latin American country is Panama but its currency, the Balboa, is pegged one to one to the US dollar. Much of the Forex world’s attention has been focused on the Euro Zone and the Euro over the last three years. Likewise the events in China and the question of an economic slowdown have attracted Forex traders. However, Latin American economic growth is likely to continue, whether from NAFTA in Mexico or raw material exports in much of South America. Foreign currency rates in this area have been volatile and potentially profitable. As always the smart trader will acquaint himself with the fundamentals and then follow technical trends to profits. The use of companies such as 3M as measures of regional growth is useful in directing Forex trading activities towards areas of potential profit.