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Bears Rule Emerging Markets as Central Banks Battle Omicron

  • EM currency gauge erases this year’s gains despite rate hikes
  • Resurgent pandemic adds to pressure on developing nations
Mexico Peso Leads Gains as Banxico Said to Sell Dollars to Banks

Photographer: Susana Gonzalez/Bloomberg

Updated on

If emerging-market central banks were having a tough time shoring up their currencies as the Federal Reserve steps up its scaling back of monetary stimulus, their task just got a whole lot harder.

Worries over the emergence of the omicron Covid-19 variant sent risk assets into a tailspin Friday, tipping MSCI Inc.’s gauge of developing-world currencies into deficit for the year and potentially on track for its first annual decline in three years.