EM FX Daily Report

The report analyzes the impact of a hawkish FOMC meeting on Emerging Market FX, highlighting a shift in sentiment toward EM carry trades. It notes that while global conditions are tighter, specific EM countries like South Africa benefit from lower oil prices resulting from a potential U.S.-Iran resolution.

Key Takeaways

• 1.The hawkish Fed surprise has increased pressure on EM carry trades, though a US-Iran deal and lower energy prices provide a partial offset for oil-importing EM economies.
• 2.South Africa remains a favored story due to the benefit of lower oil prices, while Turkey's controlled depreciation policy remains intact despite the less friendly global backdrop.

Table of Contents

• EM FX Daily Report

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