Bank of America Securities: US dollar weakens, emerging market assets are expected to bring several percentage points of return

Emerging market assets are on track to deliver several percentage points of return this year as the market expects the dollar to continue to weaken, according to BofA Securities. "We have every reason to maintain our expectations of double-digit returns for emerging markets for the full year," said David Hauner, global head of emerging markets fixed income strategy at BofA Securities. "We see the dollar as the most important driver and expect the long-end US market to stabilise." BofA is bullish on eastern European currencies and equities. Brazil remains its preferred destination for fixed income because of very high interest rates and the prospect of a rate cut at the end of the year. The dollar is now near its lowest level in two years. Wall Street's biggest names, including Morgan Stanley and JPMorgan Chase, also believe the dollar will weaken further as the Federal Reserve threatens to cut interest rates, economic growth slows and uncertainty persists over fiscal and trade policies, which could accelerate the flow of money from U.S. assets to developing countries.