"Emerging market assets" surge at the beginning of 2569 as the dollar weakens and a resurgence of "Sell America" sentiment.
Stocks, currencies, commodities, and gold in emerging markets rose sharply after US-Europe tensions pressured the dollar, triggering a "Sell America" campaign.
On January 23, 2026, at 11:13 AM, Bloomberg News reported that emerging market stocks and assets, including commodities, currencies, and precious metals, have continued their strong upward trend since the beginning of 2026, amidst pressure on the dollar from tensions between the US and Europe, which has rekindled the "Sell America" debate.
Buying interest in emerging markets accelerated on Friday, boosted by positive news from the U.S. regarding a framework agreement with NATO allies on Greenland. Asian emerging market stocks rose about 0.5%, on track to close at record highs driven by tech stocks in South Korea and Hong Kong. Meanwhile, the People's Bank of China set the yuan's reference rate above 7 yuan per dollar for the first time in over two years, prompting other Asian currencies to strengthen.
Investment flows into emerging market funds are at a record rate, reflecting a shift away from U.S. assets. Emerging market indices hit new all-time highs, with the MSCI Latin America index reaching its highest level since April 2561, while local currency government bonds in several countries also reached new record highs.
The Greenland dispute has prompted investors to question US exceptionalism and the role of the dollar, leading funds from Europe to India to diversify away from US government bonds. This capital flow has supported gains in emerging market assets, which were already being boosted by global economic growth, AI spending, political shifts in Latin America, and more disciplined fiscal and monetary policies in many developing countries.
Katie Kok, CEO of TCW Group, stated in an interview with Bloomberg Television that investors are looking to diversify away from U.S. assets, particularly bonds. "I see this as a quiet, gradual reduction in U.S. bond holdings, not a big announcement, but a gradual search for alternative investment opportunities."
Currencies like the Brazilian real, Colombian peso, and Chilean peso have appreciated by more than 3% since the beginning of the year, while gold prices have surged to new record highs, nearing $5,000 per ounce. The Polish central bank, the world's largest buyer of gold, announced on Tuesday that it had approved a plan to purchase an additional 150 tons of gold.
The iShares Core MSCI Emerging Markets ETF, valued at $135,000 billion and investing in emerging market equities, attracted nearly $6,000 billion in investment in January alone, and is on track to record its highest monthly inflow since its inception in 2555.
Oliver Harvey, a strategist at Deutsche Bank, stated that emerging market assets are one of the main beneficiaries of strong global economic growth, and as opportunities to express positive growth outlooks in developed markets become limited, the prospects for emerging markets appear even brighter.
However, analysts warn that capital flows could slow if geopolitical tensions reignite, as developing country asset markets are smaller than those of the United States. Citigroup strategists suggest that US markets may still be the primary destination for some investors once attention shifts back to the growth disparities between the US and Europe after the peak of tensions has passed.
Citigroup believes that the issue of de-dollarization and concerns about US fiscal discipline have resurfaced, which could have a positive impact on emerging market assets, similar to what happened in 2568.
Reference: bloomberg.com
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