Rally in emerging market commodity currencies to roll on

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A street money changer counts South African Rands in Harare, Zimbabwe, May 5, 2016. REUTERS/Philimon Bulawayo

Emerging market strategists were cautiously optimistic that the sector’s commodity-linked currency rally would continue in coming months, but a much slower pace of vaccine rollouts will keep high-yield seekers nervous, a Reuters poll found on Friday.

One-third of 45 strategists in the May 28-June 3 Reuters poll said the rally in commodity-related emerging market currencies would continue for six months while 14 said it would last up to a year.

A delicate split emerged among strategists predicting mild long or short EMFX positions in the next six months, with a slight bias to mild strength against the dollar – a sign of cautious optimism.

High-yielding currencies like South Africa’s rand and the Mexican peso have ended four of the last six quarters on a stronger foot, boosted by commodity price rallies and as COVID-19 restrictions dented global…

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