Currencies in developing countries have fallen off a cliff. The Argentine peso has lost more than 50 percent of its value against the U.S. dollar this year, and the Turkish lira is doing almost as poorly.
What's going on: Argentina and Turkey are both suffering from fiscal crises that have hammered their currencies.
- The Argentine government is struggling to finance its deficit, and even the world's highest interest rates aren't helping much in the midst of an economic crisis with surging inflation.
- Turkey's central bank has also raised interest rates, despite President Recep Tayyip Erdogan’s repeated attempts to keep rates low. Geopolitical tensions with the U.S. also have not helped the economy's fragile state. It's unclear how much the rate hikes will restore long-term confidence in the lira.
- A worsening trade war between the United States and China could cause more pain for emerging markets, which are export-dependent.