Emerging-Market Currency Rally to Record Now Faces Fed Reckoning
- Morgan Stanley’s quant models show EM may be turning defensive
- EM FX vulnerable to turn in dollar shorts: Societe Generale
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After a 13% advance from post-pandemic lows to a record high, the rally in emerging-market currencies looks to be fizzling out.
Gains in the South African rand -- this year’s best performer -- have stalled. Options traders are adding to bearish wagers on the Russian ruble despite hawkish comments last week from the central bank chief. And the Chilean peso suffered its biggest drop in three weeks on Tuesday as a rout in copper prices dims the outlook of the country’s terms of trade.