Markets: The dollar’s three-month high is squeezing EM currencies, here’s what’s really happening
After traders reassessed interest-rate cuts and global growth, the U.S. dollar jumped to a three-month high, tightening financial conditions across emerging markets. Stronger U.S. yields and risk caution are pressuring EM currencies, lifting import bills, raising the local cost of dollar debt, and prompting portfolio outflows. Exporters see mixed effects, while importers, CFOs, and travelers face higher costs. The playbook: layer hedges, reprice faster, match currency to cash flows, and scenario-test until Fed signals ease materially.
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