Investors See '2017-Like' Rally Happening on EM Currencies

Emerging currencies rose 11% in 2017 before tumbling in 2018 as Trump turned tariff talk into action

- Bloomberg

Emerging-market currencies are pulling off an unlikely comeback at the start of 2025 as investors grow bullish amid signs of a turning point in the US dollar.

Ninety One Plc. is forecasting developing-world currencies will gain against the greenback, reversing a call made last year. Lazard Asset Management turned positive on the asset class this month.

The about-face comes as currencies including the Brazilian real and Colombian peso post year-to-date gains of more than 6%, powered by investors seeking to harvest their rich yields.

Currencies from the Polish zloty to South African rand are also rallying, and positioning data compiled by Citigroup Inc. shows appetite for EM currencies is at the highest level since October.

Fueling those gains is a turn in the dollar, which has faltered on signs that US tariffs promised by President Donald Trump may be less severe and less imminent than expected.

Nascent US growth worries and prospects for fiscal stimulus in Europe are dragging the greenback lower as well.