Dollar rethink is pushing emerging world to sell more Euro debt

Emerging-market borrowers are tapping the euro bond market at the fastest pace in over a decade, capitalising on the rising demand for diversification away from the US dollar.

The surge is being fuelled by robust demand for developing debt, with non-dedicated investors playing a bigger role as credit quality improves. While euro-denominated bonds still account for a small share of total emerging-market supply, their volume is expected to remain high-both in absolute terms and relative to dollar-denominated deals.

"If you have an ambition to issue in euros, this is the time to do it," said Stefan Weiler, the head of debt capital markets for Central Europe, the Middle East and Africa at JPMorgan Chase & Co. in London. "Borrowers have been noticeably more active in diversifying and exploring also some niche markets."


The dollar index has fallen about 8% this year, with money managers rethinking years of heavy exposure to US assets as Donald Trump's tariff policies and jabs at the Federal Reserve roil markets. Signs of waning demand for the greenback are building, and low hedge ratios-protection against currency volatility-suggest there's room for additional declines.

Companies and governments from developing economies have sold ₹89 billion of euro-denominated debt this year through July 18-the highest amount for this period since at least 2014, according to data compiled by Bloomberg. Government issuance alone has already exceeded the full-year total for 2024.