Emerging Markets Shift to Euro-Denominated Debt as Dollar Weakens

Emerging markets are pivoting to euro-denominated debt at a record pace as the dollar's 8% decline this year and political uncertainty under a potential TRUMP administration erode its appeal. By mid-July, developing economies had issued €89 billion in euro bonds—the highest since 2014—with Poland and Romania accounting for €21 billion alone. Sovereign issuance has already surpassed 2024's full-year total.

Poland's first green bond offering since 2017 and Bulgaria's €3.2 billion sale following a credit upgrade highlight strategic moves beyond experimentation. Romania capitalized on post-election Optimism for its third euro bond this year, while South Korea, China, and Chile joined the trend. "We're actively seeking opportunities outside USD credit," said PPM America's Matthew Graves, favoring Ivory Coast's euro bonds.