Mexican peso still offers one of the highest carry returns in the space and its volatility remains lower than most comparable EM currencies. Both of these factors are durable and should support MXN outperformance over the medium term.
At the other side of the spectrum, ZAR is the worst performer so far in 2023 as its low carry and higher idiosyncratic risks have prevented it from benefiting from the China re-opening optimism.
Taking profit on short ZAR/MXN, as target is hit at parity. Continue to bet on MXN outperformance vs EM peers. Staying underweight on Colombian peso. - J.P. Morgan Strategy
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