EM Funds Adjust Bets as ‘Sell the Dollar’ Trade Loses Appeal

The dollar’s bounceback in July is convincing some emerging-market investors to bet it will keep rising in coming months.

T. Rowe Price Group Inc. says it now favors dollar-denominated emerging market bonds rather than local-currency ones as a tactical trade. Barclays Plc is telling its clients to avoid shorting the greenback versus its Asian peers, while Fidelity International says the higher-for-longer US interest rates make it less attractive to borrow the dollar to fund carry trades.