Argentina Leads Emerging Markets Downturn

Related: Argentina ETF Plunges After Central Bank Hikes Rates

There are signs that events in Turkey and now Argentina could be leading to a broader emerging market currency sell-off. Both the Brazilian real and South African rand are down almost 11% against the U.S. dollar this month, while the Indian rupee is down almost 4% this month.

As Eric Wong, a Fidelity fixed income portfolio manager, explains in a Wall Street Journal interview, “After what we saw happen in Turkey, the market started to ask what country was next: South Africa, Brazil, Indonesia … The market is still gripped at times by fear, trying to differentiate the good ones from the bad ones.”

Emerging market stocks also seem to be feeling the pressure. A broader emerging markets ETF, iShares MSCI Emerging Markets ETF (NYSEArca: EEM) is down 2% at the time of writing, while the iShares MSCI Argentina & Global Exposure ETF (BATS: AGT), which focuses on companies with considerable exposure to Argentina, is down roughly 7% on the day. Similarly, iShares MSCI Turkey ETF (NASDAQ: TUR), which seeks to mirror a broad basket of Turkish companies, is down 4% on the day.

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