Archive · 3 Aug 2025
Emerging Markets Rethink Dollar Bets Amid Currency Shift
Some investors who deal with money in developing countries are changing their plans because the US dollar is getting stronger again.
This means they might start buying bonds that are in US dollars instead of the local money.
Some experts are telling people not to bet that the dollar will get weaker.
If you were using the dollar to borrow money to make more money, you might want to try using a different currency now.
The cost to protect investments from changes in the dollar's value is going down for Asian funds.
Emerging market investors are adjusting their strategies due to the dollar's resurgence.
T. Rowe Price favors dollar-denominated bonds over local-currency ones.
Barclays advises against shorting the dollar against Asian currencies.
Fidelity suggests considering alternative funding currencies for carry trades.
Hedging costs for Asian funds have decreased as the dollar strengthens.
- Who
- Investors, fund managers at T. Rowe Price, Barclays, and Fidelity International.
- What
- Emerging market investors are adjusting their strategies due to the dollar's resurgence.
- When
- July was a key month for shifts in investment strategies.
- Where
- Emerging markets, focusing on Asian currencies and bonds.
- Why
- Due to the dollar's strengthening, influencing investment decisions.
- Dollar Spot Index Change (July)
- Up 2.7%
- MSCI Emerging Markets Currency Index (July)
- Down 1.2%
- Bloomberg Gauge of Dollar Bonds (July)
- Returned 0.9%
- Bloomberg Gauge of Local Currency Debt (July)
- Fell 0.9%
- Hedging Cost Drop (July)
- 5 percentage points