U.S.-China Trade Risk Keeps Emerging-Market Investors on Edge

  • After painful August, traders in search of good news on trade
  • EMFX to fall 2% against dollar in September: Morgan Stanley

Investors sit in front of screens showing stock market movements at a securities company in Beijing.

Photographer: Wang Zhao/AFP/Getty Images
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Emerging markets are once again at the mercy of the U.S.-China trade war after investors spent an exhausting August pivoting between disappointment and optimism for a truce.

After one of the most painful months for emerging markets in years, traders will be watching for what comes next -- and also for signals that the Federal Reserve can foster global growth. Last month proved disappointing for money managers betting on rising stocks and stronger currencies amid trade tension and a resurgent dollar. September may not be much better, with Argentina imposing capital controls amid a currency crisis.