Dollar strength rings alarm bells for US equities

Investors fear the US equity market may be the next victim of a soaring US dollar, as the strengthening currency begins to trigger fresh turmoil in emerging markets.

With the country widely predicted to be the first major economy to raise rates, the US dollar index - which measures the greenback against a basket of other major currencies - has risen 25% since last July and 11% this year alone. The dollar gave up some of its recent gains last week after the Federal Reserve pushed back on expectations of a June rate hike in the US, but a further strengthening in the currency remains a key call for many investment banks and fund managers. This strength has been a particular burden on emerging markets, which had a collective $2trn in dollar-denominate...