Current account balances are key in EM, says Westpac
As risk sentiment sours due to the ongoing trade wars between the US and China, current account deficits will weigh on some EM units
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As trade tensions between the US and China linger, investors are preparing for a potential contagion in emerging market (EM) currencies, with volatility most likely to hit units that lack the backing of substantial current account surpluses.
In the absence of a resolution of the tit-for-tat tariff war that two of the world’s largest economies are waging, investors are worried the spat will have an impact on growth prospects in Asian economies by reducing trade
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