The Fed has opened swap lines of up to $30 bln each to Brazil, Mexico, South Korea and Singapore. These mirror facilities put in place with the BOE, ECB and SNB earlier in the credit crisis. This helps these countries get their hands on hard-to-find dollars.
Emerging markets have recovered somewhat in the last few days, part of the ongoing decline in risk aversion. People aren’t jumping in to take much fresh risk, but they are no longer selling in panic as they were just days ago. This has helped let some of the air out of the dollar and yen bubbles that have formed in recent weeks.
