Political Risk Back on Radar in Emerging-Market Currency Trades
- Citigroup, Deutsche Bank recommend shorting rand after riots
- Covid fallout will worsen socio-economic challenges, BofA says
Photographer: Andrey Rudakov/Bloomberg
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South Africa’s unfolding turmoil is putting emerging-market political risks at the fore, and traders are hunting for currencies vulnerable to political hazards and playing them off against their more stable peers.
Citigroup Inc. and Deutsche Bank AG were among the lenders recommending investors to short the South African rand last week as deadly riots threatened to derail an incipient economic recovery. Chile’s peso could also swing in the coming months, depending on the outcome of the nation’s presidential vote.