The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Foreign Exchange

More upbeat tone on EM currencies, but opinions vary on best picks

Emerging markets have regained some of the buoyancy lost during the early months of the coronavirus crisis, but analyst opinions hint at the difficulty of identifying which EM currencies investors should favour.

Brazil-real-face-mask-currency-note-100-istock-960.png
A Covid-concept Brazilian real banknote. Photo: iStock

HSBC’s latest emerging markets (EMs) sentiment survey, published in January, suggested that investors became much more upbeat on EM currencies in the last quarter of 2020.

Various factors have contributed to this tilt towards long exposures, including higher commodity prices and improving economic activity globally.

However, while positive sentiment towards EM currencies is justified in the medium term, this is not necessarily the case in the near future due to a lack of visibility around vaccination programmes, not only in Latin America but also across Asia, suggests Daniel Tenengauzer, BNY Mellon Markets’ head of markets strategy.

Our long-term valuation models still point to EM FX being cheap against external drivers
Christian Wietoska, Deutsche Bank
Christian-Wietoska-Deutsche-960.png

While Deutsche Bank remains broadly constructive on EM currencies during 2021, it is turning tactically more cautious and expects the first quarter to be characterized by a higher degree of differentiation among currencies than the final three months of 2020, says Christian Wietoska, the head of the bank’s CEEMEA research team.

“Our


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree