新兴市场货币走弱The MSCI Emerging Markets Stock Index briefly fell by 0.8%, marking the fourth consecutive day of decline, setting the longest continuous decline record in three weeks.
Finance and Economics App noticed that as investors bet that the new U.S. government led by President Trump would receive strong support to implement its policies, the U.S. dollar continued to rise, causing a decline in emerging market assets on Wednesday.
The MSCI Emerging Markets Stock Index briefly fell by 0.8%, marking the fourth consecutive day of decline, setting the longest continuous decline record in three weeks. During this period, the index's market cap evaporated by $650 billion. Meanwhile, the Emerging Markets Currency Index hovered at its lowest point in three months, dragged down by the dollar rising to a two-year high against a basket of currencies.
Emerging market currencies weakened.
As the Trump Cabinet forms, the performance gap between the U.S. stock market and other stock markets continues to widen, with key positions filled by loyalists prepared to implement the "America First" policy. This has raised concerns that pushing for higher tariffs will gain support, accelerate inflation, and limit the central bank's ability to cut interest rates.
Misrath Matyeka, Global Equity Strategy Director at JPMorgan, said: "Traditionally, a strong dollar is unfavorable for emerging market stocks. If Asia does not take more meaningful fiscal stimulus measures, emerging markets may still lag behind, especially under the pressure of trade and tariff uncertainties in the region."
It has been reported that Trump's cabinet picks also include well-known hawks towards China, increasing the possibility of deteriorating relations between the world's two largest economies.
China is issuing U.S. dollar bonds in Saudi Arabia, marking the country's first dollar bond issuance since 2021. According to sources, China will issue three-year and five-year bonds, with initial price guidance approximately 25 basis points higher and 30 basis points higher than U.S. Treasury bond yields.
South Africa also entered the US dollar bonds market on Tuesday, raising $3.5 billion in its first global bond sale after the May elections in the country.
Later on Wednesday, the Bank of Zambia will decide on interest rates. Since raising rates to 13.5% in May, the bank has maintained policy stability.
