Emerging market assets rise, boosted by "US sell-off" trade

Developing country currencies and stocks rallied at the start of the week, driven by a sustained withdrawal from U.S. assets, prompting investors to turn to undervalued emerging market assets. As of 00:00 Beijing time (12:00 EST) on Tuesday, the MSCI developing country currency index rose 0.2 percent to its highest intraday level since early October 2024. The Polish zloty, Romanian leu and Thai baht gained the most among a basket of currencies tracked by Bloomberg. Fears of an economic slowdown in the world's largest economy - and more recently concerns that U.S. President Donald Trump may fire Federal Reserve Chairperson Jerome Powell - are fueling a so-called "sell America" trade that has sent U.S. stocks and the dollar tumbling. At one point, the dollar fell to its lowest level since late 2023. " It's a rotation from the US to Europe, which is also benefiting some emerging markets, "said Brad Bechtel, head of foreign exchange at Jefferies.