The USD has been very strong since the end of 2014. The promise of synchronized global growth brought with it some weakening in the USD during 2017. However, trade concerns sparked a flight to safety that strengthen the USD while putting pressure on Emerging Market (EM) currencies.

We believe that we are starting to see an improving environment for EM markets and currencies. Since the start of October, we have seen some weakness in the USD. This could be due to optimism regarding the U.S. and China reaching a phase one trade deal, resulting in an unwinding of the safe haven trade (the greenback). A weaker USD typically bodes well for EM. Additionally, the Yuan is testing the critical 7 Yuan to the USD level that it been above since early August. Should it break below this level we should see further improvement in EM currencies.

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FOOTNOTES

Yuan: This is the currency of China. The chart reflects the offshore deliverable value of the Yuan relative to the USD.

MSCI EM Currency Index: The weights of each currency within the EM Currency Index is equal to the relevant country weight within the MSCI Emerging Market Index.

MSCI Emerging Markets Net Total Return Index: The index captures large and mid-cap representation across emerging market countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country.

Index returns are for illustrative purposes only and do not represent actual fund performance. Index returns do not reflect any management fees, transaction costs or expenses. Indices are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit or guarantee against a loss. This information is not intended to be individual or personalized investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.

Information provided by Global X Management Company, LLC (Global X) and SEI Investments Distribution Co. (SIDCO). Global X and SIDCO are not affiliated.