Weaker US Dollar Seen Boosting Emerging Markets in H2 2026

Manpreet Gill, Chief Investment Officer for Africa, Middle East and Europe (AME) at Standard Chartered, believes that emerging markets are poised to benefit from a weaker US dollar in the second half of 2026.

Gill pointed out that despite recent strength in the US dollar, which has been driven by temporary factors such as geopolitical uncertainty and expectations of higher US interest rates, this support will gradually fade. He believes that inflation continues to moderate and there are no significant new geopolitical shocks, so US bond yields should ease over time, reducing support for the dollar.

A weaker or more stable US dollar would create a more supportive environment for emerging market assets, including African Eurobonds, where yields remain attractive relative to the underlying risks. Gill continued to maintain an overweight position in gold and other alternative assets because they provide valuable portfolio diversification and help improve resilience during periods of uncertainty.

Standard Chartered's key investment themes for the second half of 2026 include favoring global equities, which have delivered gains of around 10% in the first half of the year despite an uncertain backdrop. The bank also sees attractive income opportunities in corporate bonds and emerging market dollar bonds, particularly African Eurobonds.