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Emerging Markets Set for Breakout Year as Dollar Weakens
A weaker dollar, falling global rates, and improving fundamentals are creating ideal conditions for emerging market assets to outperform in 2024.
A
Alex Rivera
FX and rates analyst covering G10 and emerging markets.
May 23, 2026 · 1mo ago
1 min read2 views
Emerging Markets Set for Breakout Year
After years of underperformance, emerging market assets are poised for a significant recovery driven by macro tailwinds.
Favorable Conditions
Several factors are aligning:
- Dollar Weakness: A declining DXY typically boosts EM assets
- Rate Cuts: Global easing cycle benefits EM bonds and currencies
- Commodity Prices: Elevated commodities support EM exporters
- Valuations: EM equities trade at a 40% discount to developed markets
Regional Picks
- India: Structural growth story with 7%+ GDP growth
- Brazil: Rate cuts underway, Bovespa at all-time highs
- Mexico: Nearshoring boom driving FDI and manufacturing
- Indonesia: Commodity exports and demographic dividend
Risks to Watch
- Geopolitical tensions (China-Taiwan, Middle East)
- US election uncertainty
- China property sector contagion
- Commodity price volatility
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