I'm Buying: The Dollar Had Its Run — Now It’s EM’s Turn
Latin America Is About to Fucking Fly.
The Dollar Bounce Looks Strong… But It Isn’t
The United States dollar has had a sharp bounce, but structurally it still sits inside a weak dollar regime. Every rally over the past year has stalled right where it was supposed to, and this one is no different. The dollar pushed back into its old breakdown zone from 2022-2024 and is already struggling to move higher.
Historically, when the dollar fails from these levels, emerging markets take off. The chart of the USD against the Emerging Market ETF makes it obvious. Every meaningful dollar peak lines up with an EM run that lasts months to years.
As Ed Seykota said in Market Wizards, the trend is your friend until the end, and it doesn’t end until it bends.
This trend is still pointing toward a weaker dollar, and the cross-currents beneath the surface are already reacting.
Weak Dollar = Strong Emerging Markets
Emerging markets love weak-dollar environments because capital naturally flows toward higher carry, cheaper valuations and commodity leverage. The global leadership board confirms that this shift has already started.
Latin America is right at the top of the international ETF rankings. Chile, Brazil, Colombia, Mexico and South Africa are all outperforming the S&P on multiple timeframes. Leadership does not lie. When the countries at the top of the board share the same macro DNA, it means something real is happening.
As Stan Druckenmiller said, dollar down, commodities up, emerging markets up. It is the same movie every time. And the opening scene is already rolling.
Why Latin America Leads the Pack
Latin America has everything a weak-dollar regime loves: commodities, attractive yields, cheaper equity markets and currencies that strengthen when the dollar fades.
