Flash: Further calamity expected for emerging markets – BMO Capital Markets

FXstreet.com (New York) – We foresee more distress in the developing market FX space in the run-up to and during QE tapering, but we’re currently disposed to view recent weakness here as part of the adjustment, notes Greg Anderson at BMO Capital Markets.

Key quotes

“The concurrent buying of the domestic currencies by their respective central banks as more of a smoothing exercise rather than a preventative one. Turkey, Brazil, India, South Africa, and Indonesia, all run sizeable current account deficits, so although policy makers are in for difficult battles ahead, these adjustments triggered by a forthcoming, gradual halt to Fed balance …read more