Why is 2019 a new story for EM assets, but the same old story for FX? The MSCI EM currency index hasn’t replicated the gains enjoyed so far this year by EM equities and bonds, says Bloomberg. The index has largely remained flat since January, and perspectives differ as to why — despite the US Federal Reserve’s pro-growth stance and signs of a US-China trade war truce — there hasn’t been an uptick.

Sensitivity to global slowdown, political volatility: Some analysts are pointing to the currency’s greater sensitivity to global growth risks. Those risks are coming primarily from weak growth data in Europe, which are further exacerbated by a strong USD and China’s weak output story. Others are saying political volatility in emerging markets is “squeezing funding for those who want to hedge.”

Fund managers might have had their share of EM currencies after a decade of easing in advanced economies — with perhaps more on the way. Foreign direct investment and current account balances also tend to uptick at a slower rate than stocks and bonds when central bank policies and global risk appetite shift favorably.

Looking forward, Chinese recovery and an easing of geopolitical risks coupled with policy support from major economies will put the index on the right track.