Weak Dollar Supports Foreign Bond Returns For US Investors

Emerging markets bonds would likely benefit too. “As economies reopen, vaccines are distributed and risk appetite returns, 2021 could be a break-out year for emerging markets, especially if the US dollar continues to weaken,” says Christopher White, co-manager of an emerging markets fund at Somerset Capital Management. “An unprecedented US peacetime fiscal deficit combined with aggressive monetary stimulus is putting pressure on the dollar, which is very helpful for many emerging economies.”

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