In this special video commentary, CIO Krishna Memani explains that the primary driver behind the U.S. dollar’s recent rally was the rise in U.S. Treasury yields, which has drawn capital from overseas.

However, in his view, this rally is temporary. Memani believes that U.S. economic growth will be significantly higher given the fiscal stimulus enacted through the tax cuts of earlier this year. But he thinks it will be non-inflationary growth, as he expects some of it to “leak” to the rest of the world—including emerging markets—by Americans importing goods from all over the world. Countries that export to the United States, including emerging markets, will likely benefit from this trend. If inflation remains low, the U.S. Federal Reserve (Fed) may have less of an impetus to raise interest rates, which would help keep the dollar at bay.

Memani adds that emerging markets aren’t a homogenous bloc in the opportunities and economic drivers they face. Current challenges in certain countries, such as Turkey and Argentina, are idiosyncratic and not indicative of emerging economies as a whole, he says. But he continues to see many opportunities in emerging-market equities and local debt.