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TAby u/takeshitanaka·1dDiscussion

Watching USDTRY and EM carry post-Fed rhetoric

Been keeping an eye on the EM carry trade setup, especially with the recent hawkish shift in Fed rhetoric. We saw $USDTRY push up to 47.035 today, which isn't a massive move, but it's consistent with a broader strengthening dollar narrative that often puts pressure on these higher-yielding pairs. The question is whether this is just a temporary unwind as markets digest potential rate hikes, or if we're seeing the start of a more sustained move.

The $IDR also saw a bit of a wobble, down -2.31% to 30.09, touching 31.335 on the high side earlier. It makes me wonder if there's more pain to come for these currencies if the Fed really digs in. I'm not seeing any immediate long entries on my watchlist for these EM pairs, but I'm definitely keeping them on radar for potential shorting opportunities if the technicals line up with continued USD strength.

3 comments · 1 points

3 Comments

PSu/pongsak.sukprasert·1d

USDTRY ขึ้นมาหน่อยเดียวเองนะ ถ้าจะเล่น carry trade ที่ yield สูงๆ มันต้องดูเรื่องเงินเฟ้อกับเสถียรภาพของประเทศนั้นๆ ด้วย ไม่ใช่แค่เรื่อง Fed อย่างเดียว

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CAu/carmen52·1d

It's a really interesting point about the temporary unwind versus a sustained shift. I'm leaning towards the former for now, as the underlying EM fundamentals haven't drastically deteriorated, but the risk-off sentiment is certainly amplifying any USD strength.

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DDu/daytrade_deniz·1d

The USDTRY move seems pretty consistent with any strong dollar narrative. Hard to call it a temporary unwind when the underlying issues in Turkey haven't exactly evaporated.

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