Emerging market currencies crash on Fed fears and China slump

The currencies of Brazil, Mexico, South Africa and Turkey have all crashed to multi-year lows as investors flee emerging markets and commodity prices crumble. The drastic moves came as fears of imminent monetary tightening by the US Federal Reserve combined with shockingly weak figures from China, which stoked fears that the country may be sliding into a deeper downturn and sent tremors through East Asia, Latin America and Africa.

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The complicated "feedback loops" that created an interwoven American-Chinese boom in the last decade -- and greatly flattered the emerging markets nexus - are now going into reverse with a vengeance. Mr Jen said the weaker countries face "acute risks of a ‘sudden stop' in capital flows" when the Fed pulls the trigger. "We expect a violent sell-off in some EM currencies this year," he said.