Emerging market losses continue on Tuesday

Emerging-market assets held losses in Asian trading Tuesday, signaling Argentina’s plan to narrow its fiscal deficit and comments from Turkey’s central bank hinting at a rate increase have yet to shore up investors’ confidence.

A MSCI measure tracking developing-nation currencies fell for a second day, losing 0.2 percent as of 11:19 a.m. in Singapore, while the index tracking shares slipping 0.2 percent, after falling for the past four sessions. Indonesia’s rupiah weakened for a sixth day, sinking to a fresh two-decade low.

Argentina’s government announced emergency measures Monday, including new export taxes, after the peso tumbled 26 percent last month. Trading in the currency was too thin to judge if the plan was a success or not, with that market verdict set to come Tuesday. In Turkey, the central bank vowed to reshape its monetary policy stance at a Sept. 13 meeting after consumer inflation accelerated faster than expected in August.

Stephen Innes, head of Asia Pacific trading at Oanda Corp. in Singapore:

  • Argentina’s measures are “likely a day late and a penny short”
  • “These moves are a step in the right direction, but they’re unlikely to be convincing enough to remove currency speculators from the driver’s seat. I guess it’s all down the IMF’s ‘White Knight’ to the rescue. However, we are getting into the realm of unquantifiability which makes the market utterly untradable”

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Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.