Emerging Markets Rattled by Trump Win

Emerging market currencies and stocks fell as Donald Trump's U.S. election win drove the dollar higher and suggested potential trade barriers. The MSCI index for developing market currencies saw its largest drop since February 2023. High-beta currencies, like the Mexican peso, reacted negatively to prospects of tariffs and trade barriers.

Emerging market currencies and stocks faced significant losses on Wednesday, driven by the U.S. election results, which indicated a victory for Republican Donald Trump. The dollar saw a sharp rise, prompting fears of new trade barriers under a Trump administration.

The MSCI index following currencies in key developing markets experienced its largest single-day drop since February 2023, declining by 0.6% as the dollar gained over 1.4% and U.S. Treasury yields surged.

Currency movements were notable across the globe: Mexico's peso fell to a two-year low amid fears of tariffs, while the yuan had its biggest drop in a year. Political developments, including potential impacts on the Ukraine-Russia conflict, influenced market behavior.

(With inputs from agencies.)