The strategist said that the US-Iran agreement will drive a rebound in emerging market currencies and bonds.

Strategists say the prospect of a lasting peace agreement between the US and Iran has led to a rise in emerging market currencies and bonds, potentially marking the beginning of a stronger uptrend. Following the announcement of a temporary agreement to reopen the Strait of Hormuz by the US and Iran, the MSCI Emerging Markets Currency Index rose on Monday. JPMorgan raised its rating on emerging market currencies to overweight last week, while State Street Bank said Asian currencies, especially those related to technology-driven economies, would benefit from improved market sentiment. Since the outbreak of war at the end of February, emerging market bonds and currencies have been under pressure. Rising oil prices put pressure on energy-importing countries, leading to higher inflation and exacerbating expectations for monetary policy tightening. The reopening of the Strait of Hormuz is expected to improve the outlook by lowering energy costs and easing pressure on policymakers.