Market News
Most emerging market currencies set to hold on to gains - Reuters poll
By Devayani Sathyan and Vuyani Ndaba
BENGALURU/JOHANNESBURG, June 4 (Reuters) - Most emerging market currencies will hold the gains they have made this year or extend them against a retreating dollar in the next six months as traders ditch the U.S. exceptionalism trade that fuelled the greenback's dream run, a Reuters poll of FX strategists found.
At the start of the year, emerging market currencies looked set for a rough ride on expectations of U.S. economic strength and delayed Federal Reserve interest rate cuts as well as trade tensions.
But they have since defied expectations as U.S. President Donald Trump's broader-than-expected but erratically implemented tariff together with a deteriorating fiscal outlook have sparked a flight from the dollar and U.S. assets.
That is expected to continue, with more than half the currencies polled forecast to trade in tight ranges or gain, while the rest were expected to give back only a small portion of this year's strong gains, according to a May 30–June 4 poll of more than 50 foreign exchange strategists.
"The path of least resistance is a mildly weaker dollar at the moment," said Christopher Turner, head of FX strategy at ING.
