Emerging markets were hit hard by the resurgence of the ¡°Trump trade¡± Wednesday as the dollar and U.S. yields soared following Donald Trump¡¯s victory in the U.S. presidential race.
Currencies in Eastern Europe led losses, sending the emerging-market currency gauge to its worst day since February 2023. The Mexican peso, often seen as the most vulnerable to Trump¡¯s trade policies, edged higher in a volatile session. Earlier in the day, the currency slumped as much as 3.5%.
Traders are still uncertain over how a second Trump presidency will affect developing economies. His pledges of stronger restrictions on imports and immigration are fueling bets on higher U.S. borrowing costs and a stronger greenback, dragging down other currencies.
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