Emerging market currencies across the globe are coming under renewed selling pressure during trading this week.
The exact catalyst behind why the emerging market currencies continue
to be plagued by selling momentum is a difficult one to determine,
although the latest indications suggest that the motivator could now be
beyond central bank expectations for higher US interest rates. It is
being suggested that the persistent Turkish Lira weakness could be
weighing down on the general emerging market sentiment.
Although investors were previously treating developments around
currencies like the Turkish Lira and the Argentine Peso as idiosyncratic
matters, we are now noticing similarities between the selloff in Turkey
and Argentina leading to declines in emerging markets elsewhere. The
latest indication of this was on Tuesday
morning when comments from Turkish President Erdogan on domestic
central bank policy appear to have encouraged weakness in emerging