Emerging Currencies Face Losses of Up to 30% in Virus Sell-Down
- Ruble, Chile peso set to drop most if stocks extend decline
- Chinese yuan has proved the most resilient emerging currency
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Emerging-market currencies face further sell-downs of up to 30% if the spreading coronavirus outbreak causes U.S. stocks to slide as much as they did in the global financial crisis, an analysis by Bloomberg shows.
The dollar may strengthen a further 30% against the Russian ruble and 23% versus the Chilean peso, according to the study that examines moves in developing-nation currencies to significant sell-downs in S&P 500 Index, and scales those to a 50% loss. In contrast, the U.S. currency is likely to gain only 1% against the Chinese yuan.