Weakening USD sends investors flooding to emerging markets currencies

Emerging-market currencies saw their best week in more than four years last week as the weakening USD opened a flood gate of investors into risk assets according to Bloomberg.

EM assets added at least $1 tn in value during the week as currencies joined a rally that had been spurred by stocks and bonds.

EM equities added around USD 800 bn during the first four days of trading while bonds added USD 40 bn.

According to bloomberg, it is a breakthrough many investors have been waiting for in the past 10 weeks to assess whether the rebound from the March slump was going to expand..

Gains  were driven by domestic demand, and dollar-based investors largely stayed away. But now, the appeal of the carry trade and the hunt for yield is rising.