China Pushes Yuan Aggressively Higher As Corporate Bonds Implode
Market Depth
Why Dollar Going Up Is Bad for Emerging Market Debt
When an emerging market based corporate or whatever entity, whatever, borrows in USD, what that is essentially that's opening a short USD position. And just like any other short position, if your short USD and the dollar goes up, your short position is getting more and more expensive to buy back and cover and exit. If it's a big enough move higher, then you might find yourself with unlimited downside and unable to even close out your position and you'll just be destroyed financially. So I hope that helps for anyone who might have needed some more clarity on why dollar going up is bad for emerging market debt. It's a dollar short position. Dollar goes up. That's bad for your
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