EM structural strength in focus as dollar rallies, CIBC
But dollar gains could soon lose steam
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Investors will look to trade emerging markets on the basis of relative structural strength, as the combination of a stronger dollar and higher US bond yields is making some developing economies comparatively less attractive, says Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.
When Treasury yields increase, investors pull funds away from risky asset such as EMs and pump them into safer bets like government bonds. Higher yields also increase
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