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The rising U.S. dollar is pushing inflation up in many third-world and developing countries. It is leading to escalating commodity prices as most imported goods are paid for in dollars, with the situation being exacerbated by historically high oil prices. The unfortunate events in Sri Lanka where people took to the streets to demonstrate their anger against surging prices due to a depreciating rupee is an example of how things can degenerate into chaos, but there are many other cases where a rising dollar is leading to people having more local currency in their wallets but lesser food in their stomachs.
Now, Sri Lanka’s third-largest creditor is China, which should benefit the most from a rising USD and America’s effort to bring its supply chains back home. For investors willing to profit from these two developments, there is the iShares China Large-Cap ETF (NYSEARCA:FXI) as I will show in this…
