More Pain Seen for Emerging Currencies, Stocks as China Slows
- Focus shifts to when Fed will next raise U.S. interest rates
- Developing-nation exchange rates weaken most since 1997
China Outlook: Yuan to Weaken Further in 2016?
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Emerging-market currencies slumped this year by the most since 1997, and analysts are forecasting further losses in 2016 as China’s economy slows and the U.S. raises interest rates.
The deteriorating sentiment also hurt stocks and bonds, with an index of equities covering developing countries posting the biggest annual drop since 2011. The premium investors demand to hold emerging-market sovereign debt widened for an unprecedented third year after the Federal Reserve took the long-awaited move of tightening monetary policy and signaled more to come.