EM FX: The siren song of 'mean reversion' in developing markets

One recurring mistake I've had to learn the hard way in EM FX is the deceptive allure of mean reversion when fundamentals are truly diverging. I've been caught trying to 'bottom-pick' currencies like $TRY or $ZAR, assuming that after a significant move, a bounce was imminent, only to watch them continue to melt down as inflation soared or political risks escalated, completely ignoring the underlying structural issues.