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Emerging Markets Plunge: Worst Week Since Pandemic Looms
6 Mar
Summary
- Emerging market equities and currencies face their worst week since the pandemic.
- The ongoing Mideast conflict has strengthened the US dollar.
- Energy costs are rising, with Brent futures reaching multi-month highs.
Emerging-market equities and currencies are experiencing their sharpest weekly declines since the onset of the Covid pandemic. As of 11:30 a.m. London time on March 6, 2026, the MSCI EM currency gauge had fallen 1.6% for the week, while EM equities were down nearly 7% since the conflict in Iran began. This volatility marks the worst week for these markets since March 2020.
The Mideast conflict, now in its seventh day, has significantly impacted emerging market valuations. It has reversed trends seen last year when investors diversified into riskier assets, strengthening the US dollar. Furthermore, the hostilities have driven energy costs higher, with Brent futures climbing to their highest level since July 2024 and reigniting price volatility.
