Since then, most emerging market currencies have rebounded sharply.

The higher interest rates rise to stabilize emerging markets currencies, the more severe their crises will be.

Moreover, some emerging market currencies are joining the club of international currencies for the first time.

Since then, emerging market currencies and fixed income securities (government and corporate bonds) have taken a hit.

Thus, for the dollar to depreciate further, it will have to depreciate against the currencies of China and other emerging markets.

Emerging markets currencies also collapsed, even in economies with huge foreign exchange reserves and relatively little debt.

South Korea, Brazil, and other emerging market countries are also attractive diversification investments, causing their currencies to appreciate.

The overall trade weighted value of the renminbi has thus declined significantly, particularly relative to the currencies of the emerging market countries with which Chinese producers compete.

The performance of emerging market currencies and other assets so far in the second quarter suggests that deleveraging has begun once again.

SANTIAGO With the currencies of Malaysia, Indonesia, South Africa, Turkey, Brazil, Colombia, Chile, and Mexico hitting record lows recently, currency traders around the world are asking How much further can emerging market currencies weaken?

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But, while that implies that emerging market currencies must strengthen, disorderly appreciations would do more harm than good.

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Collapsing emerging market currencies, and the resulting trade pressures, will make it all the more difficult for them to prevent their unemployment levels from rising significantly.

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The higher interest rates rise to stabilize emerging markets currencies, the more severe their crises will be. Ultimately, even if emerging economies manage to diversify their funding away from foreign currencies, they will remain hostages to US monetary policy cycles.

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Expanding the basket to include emerging market currencies would help, but only a little, because the US and Europe still account for half of the world economy and more than half of its liquid financial markets.

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Led by strong Chinese growth, emerging markets stabilized.

Similar lessons are relevant in emerging market economies.

Moreover, some emerging market currencies are joining the club of international currencies for the first time. Indeed, some analysts have suggested that the Chinese renminbi may rival the dollar as the leading international currency by the end of the decade.

These countries, in turn, could argue that even very poor US households are much better off than the average emerging market household.

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Emerging market countries face an additional problem.

Now consider other major emerging markets.

The emerging market economies are at risk as a result.

Additional issues were identified by some participants, including

Likewise, India s public finances are stronger than they are in most emerging market countries, let alone emerging market countries in crisis.

Demand for gold jewelry in India and China soared. Emerging market central banks diversified out of dollars and into gold.

But when the time comes to pay for the ride, you may feel like you are in Boston, Luxemburg, or Zurich the value of the Brazilian real, like the currencies of many emerging market countries, is high and could go higher.

Rather, it is emerging markets like China.

Indeed, the number of excellent emerging market candidates is remarkable.