The EEMEA FX Strategist: Impact of Fed > Iran: EEMEA faces tighter reality

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The EEMEA FX Strategist: Impact of Fed > Iran: EEMEA faces tighter reality

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The EEMEA FX Strategist

Impact of Fed > Iran: EEMEA faces tighter

reality

EEMEA FX: near-term headwinds from the Fed 23 June 2026

The near-term EEMEA FX backdrop has turned more challenging. A more hawkish Fed, GEM FI & FX Strategy

driven partly by the AI investment cycle, is tightening financial conditions at a time when EEMEA

global growth is driven by the US, offsetting potential positives such as the Iran deal.

Mikhail Liluashvili

With EM positioning still skewed long and risk premia relatively compressed, we see EEMEA Local Markets Strategist

weaker EM FX in the run-up to Fed hikes. In the medium term, the EEMEA FX outlook is MLI (UK)

+44 20 7996 1142

constructive as the Fed should stay on hold in 2017 and EM fundamentals are decent. mikhail.liluashvili@bofa.com

Mai Doan

PLN (bearish): a challenging EM environment should result in the zloty underperforming CEE Economist

forwards. MLI (UK) +44 20 7995 9597

mai.doan@bofa.com

ZAR (bearish): we expect global factors to drive the rand weaker than forwards imply in

Tatonga Rusike

Q3 2026 as USDZAR remains correlated to EM FX. Sub-Saharan Africa Economist

MLI (UK)

TRY (bullish): our forecast remains below forwards as the authorities remain +44 20 7996 8446

committed to real appreciation of the currency. tatonga.rusike@bofa.com

Hande Kucuk

ILS (bearish): we are bearish US equities, which should lead to the shekel Turkey & Israel Economist

underperforming forwards. MLI+44 (UK)20 7996 3948

CZK (bearish): a stronger dollar should result in a weaker koruna even if the CNB hande.kucuk@bofa.com

continues to hike. DavidGlobal EMHauner,FI/FX CFAStrategist>>