Investors are betting that a prolonged rally in the US dollar will hurt the Hungarian forint to the Philippine peso, with the forint and Polish zloty hitting new lows recently. The widespread losses are another example of how the dollar’s strength is affecting emerging market currencies and pressuring central banks around the world to raise rates, even at the cost of a recession.
“Problems in emerging markets,” he said Megan Greene, a global economist and senior fellow at the Harvard Kennedy School, pointing to Sri Lanka’s sovereign debt crisis and the drain on its foreign exchange reserves. “It’s a familiar story in emerging markets and a harbinger of things to come.”
A strong US dollar is spreading pain to emerging market currencies
Source link A strong US dollar is spreading pain to emerging market currencies