Analysts at JPMorgan Chase are reportedly doubling down on emerging market currencies as the US dollar struggles its way through 2025.
In an analysis published last week, the financial giant’s strategists gave emerging market currencies an overweight recommendation and predicted the market wouldn’t panic over the Israel/Iran conflict, Bloomberg reports.
“The next few days will be critical to this, but we would think there is a higher bar for markets to panic.”
The recommendation is the opposite of what the investment bank’s strategists predicted earlier this year. Following President Donald Trump’s “Liberation Day” on April 2nd, JPMorgan Chase provided clients with a trade idea that involved flipping bearish on emerging market currencies.
They later walked it back in a note in May.
“Our UW (underweight) has not worked… We see sufficient arguments that EM FX (foreign exchange) will not weaken versus the USD in the coming period.”
Strategists at the bank reportedly anticipated that President Trump’s tariffs would put pressure on foreign markets’ currencies, but failed to predict that there would also be a shift away from US assets, which weakened the dollar.
The US Dollar Index (DXY) is trading at 98.22 at time of writing. The index is up 0.23% in the past day but down about 10% this year.
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