Emerging Markets FX Daily Report

A daily EM FX update noting that broad USD strength and geopolitical tensions in Iran are weighing on sentiment, leading to tactical positioning in ZAR, PLN, and HUF.

Key Takeaways

• 1.Broad USD strength and weaker global risk sentiment are currently the primary drivers for EM FX price action.
• 2.Despite the depreciation of TRY (1,800 pips/week), the desk remains long, betting on the CBRT prioritizing real appreciation and reserve accumulation.
• 3.Geopolitical risks in Iran and the Strait of Hormuz are causing tactical shifts, particularly in CEE currencies like PLN and HUF.

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