UBS On-Air: Market Moves Top of the Morning: Emerging Markets - As goes the US dollar, so goes EM
Jun 8, 2025
Alejo Czerwonko, Chief Investment Officer for Emerging Markets Americas at UBS, dives into the intricate dance between the U.S. dollar and emerging market assets. He discusses the bearish outlook for the dollar and its implications for investors, urging a fresh look at opportunities beyond U.S. borders. Notably, Czerwonko highlights Argentina's newfound promise driven by economic reforms and fiscal responsibility, while also spotlighting Brazil and Mexico as hot spots for investment amidst changing currency trends.
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US Dollar Impacts Emerging Markets
- The US dollar's strength majorly influences emerging market assets' performance.
- A bearish outlook on the dollar signals opportunities for emerging market currencies and assets.
Diversify Beyond US Assets
- Investors should diversify beyond US assets given expected gradual US dollar depreciation.
- Review portfolios for geographic and credit risk concentrations to seize emerging market opportunities.
Tariff Effects Vary Globally
- Tariffs create inflation pressures differently: inflationary for the US and disinflationary elsewhere.
- Emerging markets like Brazil and Mexico offer interesting monetary policy and currency opportunities.