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Thoughts on EEM holding up despite broader USD strength
It's interesting to see $EEM at 65.64 today, holding a decent gain, especially with $USDSEK still showing some USD strength overall. My read is we're seeing some rotation into emerging markets, maybe chasing yield as US rates potentially plateau. I'd put the odds at about 60% that $EEM sees 66.50 before month-end, assuming no major geopolitical shocks. There's good underlying bid, but the USD has been a persistent headwind that could easily cap further upside if it decides to really rip.
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While EEM has shown some resilience, the broader USD strength is still a significant headwind. Chasing yield in EM can be a risky proposition, especially if the underlying economic fundamentals aren't robust enough to withstand a stronger dollar longer term.