Currencies in Latin America, including Brazil’s real and Argentina’s peso, have strengthened against the dollar since conflict flared in the Middle East. This resilience is driven by the region’s significant oil exports, providing natural hedges against global volatility.

Dollar-denominated bonds from Ecuador and Colombia have been among the top performers in emerging markets, while Colombia’s local-currency debt also outpaced peers. Rising energy prices have boosted sovereign and corporate credit profiles in these oil-rich nations.

Portfolio managers are overweight Latin American debt, targeting carry trades that borrow in low-rate currencies to invest in high real-yield local bonds. Political alignment with the US and high regional interest rates add to the appeal for global fixed-income investors.