According to Schweser: For Portfolio balances and composition: strong economic growth in a country tend to correspond to an increasing share of that economy in global market portfolio. So investors need to be induced to increase their allocation to the currency which weakens the currency and increase the return.
Why this seems contradict relative economic strength where the stronger countries can attract more investors and thus that currency becomes appreciated because ppl need that currency to buy its investment
For first theory.seems strong countries lead to weaker currency while the second theory seems to imply stronger currency
Can anyone advise on this? thanks.