Emerging Market Assets falls as USD Rises

(Bloomberg) Emerging-market assets can’t catch a break, even though the most vulnerable countries have attempted to protect their currencies, the rising US dollar continues to influence their decline. MSCI Inc.’s index of currencies dropped for a fifth time in six days, putting the gauge on course for the lowest close in more than a year. The rand extended declines after data showed the economy entered a recession in the second quarter. The LIRA also fell due to concerns that the Turkish central bank will disappoint at its rate meeting next week, despite their promise on Monday to reshape the country's monetary policy stance. Argentine bonds reversed earlier gains even after President Mauricio Macri’s announcement of emergency measures to stem the current crisis in the country. 

Meanwhile, the dollar extended its advance to a fourth day as U.S. President Donald Trump threatened to ramp up a trade dispute with China, with an announcement of tariffs on as much as $200 billion in additional Chinese products as soon as Thursday. With U.S. rates rising, investor worries over idiosyncratic risks in emerging markets have been deepening, including Argentina’s fiscal woes, Turkey’s twin deficits, Brazil’s contentious elections, and South Africa’s land-reform bill.