FXStreet (Delhi) – Research Team at BBH, suggests that while EM FX had gotten some traction in early Q4, the medium-term bear market is clearly back on track as 2016 begins. Key Quotes “Commodity prices have resumed their slide, and this will continue to have significant implications for EM, negatively impacting Latin American economies the most. On the other hand, Asia and Eastern Europe generally benefit from lower commodity prices, and so these regions are likely to continue outperforming. The dollar’s appreciation against the majors had stalled in early Q4, but the pendulum has swung the other way. Concerns about China are adding to the EM headwinds. As such, we retain a defensive posture with regards to EM, and we recommend investors to focus on fundamental factors. With a negative EM environment intact (slow global growth, low commodity prices, rising US rates, and a strong dollar), we feel that high carry will do very little to protect those currencies that are most vulnerable. In EMEA, the carnage continues. USD/ZAR made a new all-time high today above 16.20 before stabilizing a bit. The rand has now completely given up its post-Gordhan relief rally, and is set to continue weakening further. USD/TRY is trading on both sides of 3 and is on track to test its all-time high near 3.0750 from September. USD/RUB made a new cycle high above 76 today before stabilizing, and the all-time high near 79 is within sight. Latin America has been hit particularly hard. USD/MXN made a new all-time high today around 17.72 before the 1% circuit-breaker kicked in. USD/CLP made a new cycle high today around 724, and the all-time high from 2002 near 760 is within sight. USD/BRL has lagged a bit in recent days, but we expect the pair to test and move beyond the all-time high near 4.25 in the coming days. USD/PEN is making new cycle highs, while USD/COP is nearing its all-time high near 3380. Emerging Asia has held up relatively well compared to the other regions, but many currencies are still trading at multi-year lows against the dollar. These include CNY, SGD, and TWD, but others are expected to join this club soon. For more information, read our latest forex news.