This chart will be included in the second (i.e., not yet tomorrow’s) Vartti of the week.
I have often talked about how the weakening of the dollar gives an extra boost to emerging economies. In practice, many emerging economies use a lot of dollar-denominated debt or make payments in dollars, which is a strong currency. When the dollar weakens, the debt becomes cheaper.
The emerging markets equity index (blue) also correlates similarly with the dollar index (black). Note: the dollar index is