📉💱 Emerging Market Currencies Poised to Hold or Extend Gains – Reuters Poll

🌍 A brighter outlook for EM currencies as the dollar weakens. Here's what you need to know:

🔹 Stronger EM Currencies: Most emerging market currencies are expected to maintain or build on 2025 gains as the U.S. dollar retreats.
🔹 Shift in Sentiment: Traders are moving away from the “U.S. exceptionalism” narrative, which had previously supported the greenback.
🔹 Key Drivers:
• Deteriorating U.S. fiscal outlook
• Trade tensions under Trump's erratic tariff policies
• Rising global risk appetite for EM assets

🔸 Carry Trade Appeal:
• 💸 Investors are borrowing in low-yield currencies to invest in high-yield EM currencies
• 📈 Brazilian Real: +10% YTD (expected to give back only ~2%)
• 📈 South African Rand: +6% YTD (likely to remain stable)

📊 Strategist Insight:

> "The path of least resistance is a mildly weaker dollar... EM currencies are being bought on dips."
— Christopher Turner, ING

🔻 Watchlist:
• 🇹🇷 Turkish Lira: Expected to weaken further (➡️ from 39 to 42.8 per dollar)
• 🇨🇳 Chinese Yuan: Likely to stay rangebound despite economic concerns

⚠️ Risks Ahead:
• Trade disruptions
• Potential global growth slowdown

💬 "EM outperformance could continue, but caution is warranted," says MUFG’s Lee Hardman.

📌 Bottom Line: EM currencies are standing firm—and possibly rising—on the back of a softening dollar and growing investor interest. 📈🌐