A stronger dollar raises external financing costs for developing economies and usually leads to lower commodities prices, a relevant point because many developing commodities are major commodities exporters.

“Several persistent macroeconomic trends have boosted the US dollar. These include faster economic growth relative to other developed and emerging markets, higher interest rates, and more aggressive central bank monetary policy tightening. None of these macro trends show signs of changing in the near term,” said FTSE Russell Managing Director Alec Young.

For more ETF trends in emerging markets, click here.

Tom Lydon’s clients own shares of VWO.