FYI: Will emerging markets endure more pain?
The mood has darkened among the weak links of the EM world, with Argentina forced to push interest rates to an eye-popping level of 60 per cent. Meanwhile, a slew of EM currencies is under intense pressure as investors recoil from exposure to Turkey, India, South Africa and Indonesia— economies dubbed the “fragile five” given their dependence on external funding. Also in the spotlight is Brazil ahead of elections in October.
Few expect relief for EMs, as further US policy tightening will probably push the dollar higher.
The MSCI EM Currency index has fallen some 8 per cent from its peak in April and still sits some 12 per cent above its nadir in early 2016.
Regards,
Ted
https://www.ft.com/content/7dd12772-ac44-11e8-94bd-cba20d67390c
