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Emerging markets are surging to record levels in 2026 as global asset managers increase allocations to EM equities and bonds, driven by expectations of sustained economic growth and a weakening U.S. dollar. The shift in capital reflects improved risk appetite amid dovish central bank policies and divergent monetary trajectories between developed and emerging economies. A weaker dollar is making EM assets more attractive to foreign investors, fueling equity and bond market rallies. This trend signals a potential long-term reallocation of global portfolios toward higher-growth markets, with implications for currency flows and commodity demand.
