Currency Carnage: Gross Warns On "Fakers And Breakers", Morgan Stanley Tells Asia To Watch Its REER

From Zero Hedge:

What does China's "surprise" move to devalue the yuan mean for "broken" EM currencies? Nothing good, Morgan Stanley says. In short, the path ahead is riddled with exported deflation and decreased trade competitiveness against a backdrop of declining global growth and trade.

...as can be seen in Exhibit 4. SGD, TWD, KRW all have over 20% of their total exports exposure and over 10% of GDP dependent on manufacturing and electronics-based exports to China. While import demand from China has already been in decline, RMB depreciation makes imports from these countries less attractive.


Here's a look at how the currencies Morgan Stanley mentions as the most exposed have performed YTD and over the past week:



http://www.zerohedge.com/news/2015-08-17/currency-carnage-gross-warns-fakers-and-breakers-morgan-stanley-tells-asia-watch-its