The rules of the game have changed for emerging countries

The emerging countries’ environment is dramatically changing. It used to be an easy place to play but it is no longer the case. Stability in developed countries’ monetary policy was an opportunity for them. Their interest rates were higher and the spread with the US was a strong source of return.
What has changed?
The dollar, which was perceived as weak by many investors, now follows an upward trend. Since mid-April its effective exchange rate has appreciated by more than 4%. As it can be seen on the graph, it’s also a surge vis-a-vis the euro.  Continue reading