FICC Focus EM Lens: Cyclical Sweet Spot for EM Persists, Dollar a Key Risk
Feb 24, 2026
Christian Lawrence, chief cross-asset strategist at Cooperative Rabobank, offers macro and cross-asset perspectives on FX, rates, and EM fixed income. He discusses the dollar’s weak outlook and how hedging shapes flows. He covers carry trade dynamics, why market volatility stays low, and where selective EM local investing looks most attractive.
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Dollar To Be Soggy Not Swept Away
- The dollar is likely to be soggy with a mild bearish bias rather than sharply rallying or collapsing.
- Christian Lawrence ties last year's sharp dollar sell-off to euro-dollar repricing after the Trump-Zelensky interview and stretched positioning, not a structural regime shift.
Dollar Bull Admits Surprise From Last Year
- Christian admits being a long-term dollar bull who didn't foresee last year's rapid sell-off.
- He attributes the move to positioning and euro repricing after geopolitical events rather than a pure structural dollar decline.
Foreign Demand Persists But Hedge Ratios Are Dynamic
- Foreign investors still want US equities and bonds but increasingly hedge dollar exposure rather than hold it naked.
- Hedge ratios are more dynamic now and used opportunistically, not fixed monthly mechanical flows.