Emerging Market Assets Rise, Boosted by "Sell America" Trade

Driven by continued withdrawal from U.S. assets, currencies and stocks in developing countries rose at the beginning of the week, prompting investors to turn to undervalued emerging market assets. As of 00:00 EAT Tuesday (12:00 ET), the MSCI Emerging Markets Currency Index rose 0.2%, marking its highest intraday level since early October 2024. The Polish zloty, Romanian leu, and Thai baht led gains among a basket of currencies tracked by Bloomberg. Concerns about a slowdown in the world's largest economy—along with recent worries that U.S. President Trump might fire Federal Reserve Chair Powell—are fueling the so-called "Sell America" trade, causing U.S. stocks and the dollar to plunge. The dollar fell to its lowest level since the end of 2023 at one point. "This is a rotation from the U.S. to Europe, which is also benefiting some emerging markets," said Brad Bechtel, Jefferies Head of Forex.