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Sell-Side Favouring TRY & RUB Into Month-End

EM FX
  • Majority of the sell-side seen positioned very short dollars into month-end with most remaining OW TRY & RUB as core plays with the DXY having taken out key support at 92.00.
  • ZAR also remains part of the risk proxy basket recommendation, with risk premia expected to continue compressing on favourable vaccine/global risk sentiment.
  • Traders remain bullish TRY, but tentatively watching local flows for signs of conflicting local-foreign sentiment.
  • Local gold & FX purchases continue to notch higher this week (~$4bn total in two weeks). USD/TRY move through 7.80 seen as bear trigger to push lower.
  • RUB continues to be held back by daily corporate purchases of EUR & USD with 76.00 acting as a magnet keeping USD/RUB in its bear channel.
  • Positioning slightly lightened into month-end but core shorts remain, with a sell the rally approach being adhered to.
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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