💸 The Dollar isn’t as untouchable as it used to be

If you shifted some of your cash into emerging-market currencies at the end of last year, congratulations, you’re probably enjoying some sturdy gains about now.

The Dollar’s sliding and emerging markets are loving it

2026 has gotten off to a quiet start with one of finance’s oldest strategies making people money: the carry trade. 

Investors are borrowing in dollars and betting heavily on currencies such as Brazil’s real, Turkey’s lira and Colombia’s peso, markets where central banks have maintained high interest rates even as inflation has cooled.

The result? A 1.3 percent surge in Bloomberg’s own carry trade index this month alone, on top of last year’s 18 percent return, the steepest gains in more than a decade. (For those keeping score at home: That’s ahead of the S&P 500, gold and yes, even Bitcoin, for now.)

Brazil’s real is the currency star

The Brazilian real has been the world’s best-performing currency, using its pandemic-era decline to give itself a shot in the arm just as global investors begin going shopping.

Brazil’s real is up more than 4% this year so far. That’s on top of a 23.5% gain last year. Wall Street also has a thing for Turkey and the Czech Republic. Morgan Stanley and Citi both identified them as 2026 favorites.

On the other side? India’s rupee and Indonesia’s rupiah have fallen. But not every EM currency is cut out for this.

So why is the dollar weakened?

It’s no longer just about rates. Brutish trade threats by Trump revive fears of another tariff war. Markets are just beginning to price in more volatility, and with $8 trillion worth of European holdings linked to US assets, the dollar’s reserve currency status is not as unassailable as it once was.

Even BlackRock cautioned in a recent report that were political risks to mount foreign governments might hasten their downsizing of dollar exposure.

And how about crypto?

To crypto people, it’s old hat. Weak dollar? Investors seek other potential stores of value. That’s helped gold rally to all-time highs. Tokenized gold is surging too.

And as much as Bitcoin is down this week, its “digital gold” sales pitch gets louder every time the greenback stumbles.

There’s a larger macro story at play here: the old guard (dollar hegemony) is under attack, and emerging markets, gold, even crypto could benefit from the cracks in the foundation.

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Silver just did something we normally only see in crypto.

In the course of 14 hours, the silver market moved by close to $2 trillion in long positions.

It began the day with a $500 billion jump in market cap…

Then plummeted on by almost $950 billion…

And somehow recovered another $500 billion..

That is almost Bitcoin’s entire market value, up and down, and then back up again, in a single day of trading.

The most pithy tweet doing the rounds:

For a metal often mocked as “boring,” silver just flipped the script. Some traders are scrambling to put any sense at all on it, blame now includes algotraders, then flight-to-safety demand gone haywire and there’s the odd muffled “manipulation.”

All we know is: someday, this will be in textbooks.

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