Emerging Currencies Are in the Bull's-Eye as More Central Banks Signal Hikes
- Investors face ‘inflection point,’ says Brown Brothers’ Thin
- Goldman Sachs sees slow rise in yields, less cause for alarm
This article is for subscribers only.
With yields surging across major economies as more central banks hint at joining the Federal Reserve in tightening policy, strategists are pointing to a likely loser: emerging-market currencies.
The fallout is already being felt in the foreign-exchange market as investors eye the end of an era of unprecedented stimulus. An MSCI index of emerging-market currencies hovered near a seven-week low Thursday as yields on Treasuries and bunds rose to fresh highs. In 2006, the last time investors braced for steeper borrowing costs in the biggest economies, the index lost almost 5 percent of its value in a span of weeks, while developing-market stocks plunged.