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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