BNP Paribas has extended its STEER model, the bank’s short-term estimate of exchange rate fair value, to cover a range of emerging markets with the launch of EM STEER.
BNP Paribas said that the new fair value FX model will help investors in detecting mispricings in 21 EM currency pairs in Asia, Latin America and CEEMEA from their short-term fundamentals. It will provide a framework for identifying when a currency is mispriced relative to interest rate, equity and commodity markets.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The three principal reasons which EM STEER will bolster the reach of FX Strategy at BNP Paribas includes: use financial market data rather than economic data to determine fair value; provide a short-term under/over valuation signal; and aim at non-quant as well as quant investors.
Steven Saywell, global head of FX Strategy at BNP Paribas said: "BNP Paribas STEER is designed to be useful for all investor types by helping to identify when a currency is mispriced relative to other financial markets. BNP Paribas’ extensive backtesting of the model indicates that it should be a useful quantitative tool for our clients."
"BNP Paribas STEER pioneered an approach to establishing short-term fair values of G10 exchange rates based on relationships with interest rates, equities and commodities. Our emerging market model follows this approach," Saywell added.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData
