Stocks Expected To Rise As The Dollar Goes On A 10 Day Streak

By Benadeta Mwaura - Reporter

Kenya, December 4 2025 - Global markets got a lift on December 4, 2025, as optimism over a possible U.S. interest-rate cut helped calm volatility. Across Asia, Europe and the United States, stocks rose, the U.S. dollar weakened and bonds stabilized, a welcome respite for investors after recent turbulence.

Japanese markets led the rebound, with key indices climbing after a strong auction of long-term government bonds drew unusually high demand, a sign that investors are relatively confident even in uncertain times.

Meanwhile, in the U.S., softer economic data and declining expectations of monetary tightening fueled hopes that the Federal Reserve (Fed) may lower rates soon, a move that pushed the dollar to its longest losing streak in decades.

For global financial markets, the shift in sentiment comes just months after a bumpy 2025 marked by sharp swings linked to central-bank policy uncertainty, bond-market stress, and a broader sell-off that many analysts tied to changing interest-rate expectations.

What makes the latest rally meaningful is that it reflects a potential turning point: it’s not just driven by short-term optimism, but by renewed confidence in macroeconomic stability.

Lower bond yields and a softer dollar help ease pressure on emerging markets and debt-heavy economies, many of which have suffered currency depreciation and rising borrowing costs in recent months.

Indeed, the decline in the dollar can reduce the burden on countries that import goods priced in foreign currency. For investors globally, and in emerging economies in Africa, this environment may spur increased capital flows into equities, local-currency debt, and risk-assets.

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With bond yields stabilising and the dollar weakening, the relative attractiveness of non-U.S. assets improves, potentially boosting foreign direct investment and portfolio inflows to emerging markets.

Moreover, the relief rally comes after a recent stretch of harsh corrections: only a few weeks ago global equities tumbled as investors braced for sustained high borrowing costs, and that memory keeps credit, currency and emerging-market risks very much alive.

For emerging and frontier economies, especially those reliant on foreign-currency debt or commodity exports, the consequences could go either way. On one side, easier financing conditions, a weaker dollar and stabilizing investor sentiment could ease debt-service burdens and encourage fresh investment.

On the other, any renewed tightening, or a surprise macro-shock, could once again destabilize currency markets, raise debt servicing costs, and reverse recent gains. Investors around the world are closely watching several key indicators that could shape market sentiment in the coming weeks. The upcoming Federal Reserve decision on interest rates is particularly pivotal, as the global mood hinges on whether the Fed cuts, holds, or issues a surprising hawkish signal.

Bond auctions and yield curves in both advanced and emerging economies will also be monitored to gauge the depth of investor confidence. Currency movements, especially in the dollar and major emerging-market currencies, are critical, as a sustained dollar slump could attract capital inflows into Africa.

Additionally, trends in commodity and export-led sectors, which often reflect broader risk sentiment, will be closely observed, along with the appetite among institutional investors for emerging-market equities and sovereign debt. For African economies and investors, the next few weeks may offer both opportunity and risk, making prudent monitoring, risk-management and strategic positioning more important than ever.