King dollar is left, right and centre of emerging-market malaise

Borrowing where rates are low to invest in higher-yielding emerging-market assets is futile if the dollar’s strength wipes out gains.

ISTANBUL: Rather than weaken, the world’s reserve currency has strengthened against all but one major emerging-market peers since the Federal Reserve cut interest rates in July.

Earlier this month, the trade-weighted dollar index touched an all-time high, pushing past a peak seen in 2002.

Meanwhile, speculation that China may be using the yuan as a tool in the trade spat with the U.S. is bolstering havens, a sign that the worst for emerging-markets probably isn’t over.