Will the problems persist and expand
A big reason for the recent US dollar bid is emerging markets. When money flees places like Turkey and Argentina, it tends to land in the US dollar with some also filtering into the red-hot Swiss franc.
In the grand scheme of things, Turkey and Argentina are small problems. They're also unique in that they have large current account deficits and small FX reserves.
However there are signs that problems are spreading. The Brazilian election is adding uncertainty and the South African rand is under heavy pressure today.
BCA warns that the risks of an acceleration of selling in emerging market assets is rising. With Trump potentially set to do battle with China, the trigger could be tripped at any moment.
