“President Trump’s decision…means geopolitical risks remain high and this added uncertainty leaves emerging market sentiment fragile for now,” analysts at MUFG said in a research note.

New Deal Between Iran and U.S.?

Nevertheless, some market watchers are hopeful that a new deal between Iran and the U.S. is in the works, with some traders easing the losses in emerging market currencies, Piotr Matys, emerging market foreign exchange strategist at Rabobank, told the WSJ.

Trump’s move has also sent crude oil to a fresh three-and-a-half year high of $77 per barrel Wednesday. The rising costs for raw materials, like crude oil, are particularly troublesome for some emerging economies that rely on imports, such as Turkey.

The ongoing trend this year be a wake up call for emerging market traders whom enjoyed a relatively optimal year in 2017. Money poured into the emerging markets last year and earlier this year on a soft U.S. dollar, low volatility and broad global growth. However, the recent volatility has many questioning the easy play.

For more information on the developing economies, visit our emerging markets category.