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Greenback Run Higher Crushing EM Currencies

EM FX
  • USD's run higher making further waves across EM currencies, with new cycle (and in some cases record) lows for ZAR, TRY, BRL, CLP and others.
  • EM currencies mimicking the price action seen across global equities, with deterioration of equity markets putting the e-mini S&P on track to test the early July lows and the mid-June lows which are just ~2.5% away from current prices.
  • Latest wave of risk-off triggered by cash equity open in the US, with big banks JPM and MS both softer and citing the weak macroeconomic outlook in their respective earnings reports.
  • Additionally, inflation pressures seen tipping the Fed further at the July meeting, with Citi now seeing a 100bps Fed hike as the most likely outcome of the FOMC meeting week after next.

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