Like the premature report of Mark Twain's death more than a century ago, rumors of the demise of emerging market growth in the era of President Donald Trump may be greatly exaggerated.
Trump dropped a hint recently that the policies of his administration — which is embracing trade protectionism abroad while fostering faster growth at home through tax cuts and infrastructure spending — would distance itself from a strong currency.
The "strong dollar" policy, rooted in the Clinton era, has had varying levels of support from subsequent administrations. Still, a muscular greenback is also a concern for developing economies, which are already struggling to adjust to the prospect of higher U.S. interest rates.
All things considered, however, it appears developing markets are holding up well under the potential strain. Capital Economics pointed out this week that over the last month, the MSCI Emerging Markets Index has jumped more than 6 percent in local currency terms, led by a 10 percent surge in Latin America.
Given that the dollar's gyrations have significant spillover in international markets, it raises the question of how frontier markets, many of which are reliant on exports, will respond if their currencies turn volatile under Trump's policies.
Analysts say Mexico is one of the countries most vulnerable to a stronger greenback — evidenced by the peso's tumble this week after a canceled visit by Mexican President Enrique Pena Nieto in the wake of the dispute over Trump's plans for a border wall.