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The risk-on trade sends emerging markets currencies to new lows – Sober Look

This is a syndicated repost published with the permission of Sober Look. To view original, click here. Opinions herein are not those of the Wall Street Examiner or Lee Adler. Reposting does not imply endorsement. The information presented is for educational or entertainment purposes and is not individual investment advice.

Today’s China-induced “risk-off” trade sent emerging markets currencies into a sharp decline. As discussed before Turkey and South Africa have been hit the hardest recently and today touched fresh all-time lows.

ZAR = South African rand, TRY = Turkish lira
(chart shows dollar appreciating against these currencies; source:

But even some of the larger emerging markets nations saw their currencies decline to multi-year lows. Brazil and Russia in particular experienced a significant selloff.

BRL = Brazilian real, RUB = Russia ruble
(chart shows dollar appreciating against these currencies; source:

The “risk-on” currency correction was not limited to emerging markets, as the Australian dollar touched levels not seen since 2009 (at some point hitting US$ 0.874 – vs. 1.05 last spring). It seems that some of the volatility seen in global markets during the Eurozone crisis has returned.

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