Goldman Sachs expects that emerging market stocks and currencies will rise by the end of the year.

Goldman Sachs strategists believe that, driven by favorable macroeconomic conditions, positioning trends, and favorable seasonal factors, emerging market stocks and currencies will rise before the end of the year. Goldman Sachs has raised its 12-month target for the MSCI Emerging Markets Index from 1370 points to 1480 points, indicating a further upside potential of around 10%. Emerging market currencies have strengthened over the past month and outperformed developed market currencies. Goldman Sachs believes that this trend will continue, as arbitrage, the cyclical dynamics of the US dollar, and the strong performance of emerging market stocks will all support further upside potential.