Key Points:
- U.S. dollar breakout is sending EM currencies lower. Most at risk are the Turkish lira and Argentinian peso. Also extremely weak are the Russian ruble, Brazilian real, South Africa rand, and Indian rupee.
- Past EM currency crises in the late 1990s were mixed in their effect on U.S. equities.
- Asian crisis in 1997: not much of an effect on U.S. market throughout.
- Ruble collapse in mid-1998: immediate negative effect sending U.S. market into sharp correction, but no end to bull market and recovery within a couple of months.
- Brazilian real devaluation in early 1999: not much of an effect on U.S. market.
