Dollar-Denominated EM Assets Outperform, UBS Strategist Says

Dollar-denominated emerging market assets are outperforming their local-currency peers, according to Shamaila Khan, Head of Global EM and APAC Fixed Income at UBS Asset Management.

Khan noted that the strong performance is driven by a combination of favorable global liquidity conditions and attractive valuations in hard-currency EM debt and equities. With the US dollar remaining relatively strong, dollar-denominated EM bonds offer higher yields compared to developed market alternatives, drawing investors seeking income. This trend also supports EM equities, as companies that generate revenue in dollars benefit from the currency mismatch. For stock market traders, the outperformance of dollar-denominated EM assets signals a preference for quality and liquidity in emerging markets, often correlating with a risk-on sentiment in global markets. Live stock prices and charts on NowPrice reflect how these flows are impacting EM-focused ETFs and ADRs.

Looking ahead, traders should monitor US interest rate expectations and the dollar index, as shifts in Fed policy could alter the attractiveness of dollar-denominated EM assets. Key data releases include upcoming EM central bank decisions and US inflation reports, which will influence capital flows into the asset class. Additionally, geopolitical developments and commodity price movements remain important drivers for specific EM countries.