EM FX: Constructive outlook with LatAm leading – MUFG

💡 DMK Insight

MUFG’s bullish stance on EM FX for 2026 is worth a closer look, especially given the current macroeconomic backdrop. With global growth projected to remain strong and US tariff risks appearing contained, emerging market currencies could benefit from increased investor confidence. This environment is likely to attract capital flows into EM assets, which could lead to appreciation against major currencies like the USD. Traders should keep an eye on fiscal and monetary policies in key economies, as these will influence currency strength. However, it’s essential to consider potential risks, such as geopolitical tensions or unexpected shifts in US monetary policy that could disrupt this positive outlook. For now, monitor key EM currency pairs against the USD and watch for any signs of volatility that could indicate a shift in sentiment. A strong breakout above recent resistance levels could signal a buying opportunity for those looking to capitalize on this trend.