On EM Currency Risk and the 'Safe Haven' Narrative

Been watching the $AUDUSD action closely, currently around 0.68907. There's a persistent narrative that certain EM currencies offer 'diversification' against the major pairs, or even act as a safe haven in specific global market scenarios. While I can appreciate the theoretical underpinning of uncorrelated assets, the reality on the ground, especially when you factor in capital flight risk and the inherent volatility that often accompanies emerging economies, makes me question this.

We see large cap tech like $MSFT powering through at 372.97, and then indices like $HSI dipping at 22671.86. The macro winds are certainly unpredictable. My concern is that in true risk-off environments, the 'diversification' argument for EM currencies often evaporates, turning into amplified downside rather than a protective hedge. Is the market truly pricing in the underlying political and economic stability (or lack thereof) in these regions, or are we sometimes over-optimistic about their resilience during global downturns? Would be keen to hear where others stand on this, especially those who've navigated EM FX through a few cycles. Am I being overly cautious here, or is the 'safe haven' tag for some EM currencies largely a myth?