Recent weakness in emerging market currencies has sparked worries that they could face a bout of pain reminiscent of last year's sell-off, analysts told CNBC.
"Everything seems to be going against emerging market currencies right now," Nizam Idris, currency analyst at Macquarie told CNBC, highlighting a number of headwinds including U.S. dollar strength, China growth worries and structural issues.
Ratings agency Moody's put Brazil's credit rating on negative watch on Tuesday citing tepid economic activity, deteriorating government accounts and declining investor confidence, triggering a sell-off across Latin American currencies. Concerns about U.S. interest rates exacerbated the decline; both the Brazilian real and the Colombian peso have lost around 2 percent against the dollar since Monday.
"The Brazilian real, Colombian peso and Chilean peso all got smashed - I think it sends a message that emerging market and commodity currency rating is probably at the end of that up-cycle," Idris said.
Most currencies weakened against the U.S. dollar early this week after research from the San Francisco Fed indicated that the central bank may raise rates sooner than investors expected.
"Overall if we do get a scenario where the dollar strengthens more broadly - and we do see that - then it will be pretty hard for most EM currencies to remain resilient... But we don't see as an aggressive sell-off as we saw last year," said Dominic Bunning, currency strategist at HSBC.
"The fact that we are seeing this in countries like Brazil is an indication that some of the broader pressures are building on emerging market currencies because of what's happening in the external picture," he added.