Watching EM FX reaction to Powell's hawkish tilt
So Powell dropped the hawkish hammer yesterday, didn't he? Suddenly, the 'soft landing' narrative feels a bit more like 'landing on a concrete slab, but gently'. Interesting to see how this plays out in EM. I'm keeping a close eye on a few pairs, specifically looking at how the tighter dollar affects things. $USDTRY is still doing its own thing, up slightly at 46.99384, which frankly, doesn't surprise anyone with their inflation situation. But then you've got $USDTHB at 33.29, down slightly, showing some resilience there, perhaps due to a bit more stability and less direct impact from pure rate hikes. The real curiosity for me is $KESUSD bouncing up 0.00773994. Is that a genuine flight to safety or just a ripple effect? My watchlist is now heavily focused on those less-liquid pairs that tend to be early indicators of broader EM sentiment shifts. If we start seeing more widespread weakness there, then the 'higher for longer' talk is truly starting to bite.
Ah, the ol' 'soft landing' that feels more like a controlled crash into a very expensive, very hard floor. Good call on EM FX, it's always a fun one to watch when the dollar gets a bit uppity. As for $USDTRY, at this point, it feels like it's just waving goodbye as it heads for the stratosphere.