Analysts from the Bank of America (BOFA) indicated that the prevailing bearish sentiment on the foreign currency (FX) of Eastern Europe, the Middle East and Africa (Eemea) is approaching its peak, in which they mainly noticed an exception for the Turkish Lira (try).
According to Bofa’s own flow data, there is a record high in lung positions on the US dollar compared to currencies from emerging markets (EM), which is interpreted by the analysts as a counter -thread signal that the currencies from the emerging markets and the Eemea soon expectations could surpass, possibly from February. Or March.
The report emphasized various currencies in the Eemea region with bullish prospects. The Polish Zloty (PLN) is expected to become stronger as a result of a combination of a weaker dollar, an aggressive attitude of the Polish National Bank (NBP) and a positive intake into the current account and direct foreign investments (FDI). The South African edge (ZAR) is also seen as bullish, because his undervaluation compared to the dollar is about to correct in a weaker USD environment.
In Turkey, analysts are optimistic about the lira, referring to a tight monetary policy that supports adjustments in the current account, which should improve the currency. Their prediction for the try is considerably more favorable than the current term interest rate.
The Israeli Bank (ILS) has neutral prospects of the BOFA, with predictions that are in line with the term interest rate for the second quarter of 2025. However, they recognized potential upward risks for the Sjekel if the cease -up agreements in the region are fully implemented.
For the Czech Crown (CZK), the report suggests that the currency will probably perform better than the term interest rate indicates, since the Czech National Bank (CNB) is expected to be careful with its relaxation cycle in the short term, and have to support a weaker dollar extra support bid.
Finally, it is expected that the Hungarian Forint (HUF) will gain strength from the second quarter, supported by credible new leadership of the central bank and budget policy, in addition to the influence of a weaker USD.
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