After a lacklustre start to 2018, the dollar index DXY, which measures the US dollar’s performance against a basket of six developed-market currencies, rose around 7 per cent from its February low of 88 to above 94 on 18 September. On the same day, one Australian dollar (AUD) bought around 72 US cents, having traded at nearly 78 US cents at the start of the year. The direction of the US dollar is also pertinent to the outlook for emerging markets (EM) assets. Firstly, most developed-market investors in EM equities or local currency bonds do not hedge their currency exposure....