Hands Tied and Swords Bent, Emerging Markets Battle the Dollar
- Divergence from commodities is ominous sign for currencies
- Idiosyncratic risks come to the fore as dollar extends rally
Argentina Peso Falls To Historic Low Against U.S. Dollar
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The selloff in emerging markets that began three weeks ago has a disturbing undertone that makes it more dangerous than the boisterous blowout in late January.
The global “wobble” earlier this year grabbed headlines because it came with a sudden surge in volatility. But it proved to be a flesh wound, as the famed resilience of emerging markets aided a quick rebound in stocks, bonds and currencies. With the U.S. dollar losing its momentum, investors were lured again to carry-trade opportunities.