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Do you dare trade emerging market currencies?
"We could be setting ourselves up for the mother of all counter consensus trades". That's the view of Michael Ingram, BGC Partners' Market Strategist who considers whether now could be a good time to trade emerging market currencies.
The Indian rupee, the Brazilian real and the South African rand are among some of the biggest fallers year to date. Michael says the fear of tapering in the US has seen the unwinding of a number of carry trades in emerging markets. India, with its sizeable current account deficit, has been particuarly punished.
Ingram says there's the old investing adage that you should be investing "when there's blood on the streets". But is the time now right to start buying some of these vulnerable looking currencies? He says there are a number of major questions hanging over the market, not least whether China is about to bounce back and whether structural reforms can really take place. However, if conditions are right, he says it could be "game-on" for emerging markets once again in 2014.
01:37 minutes
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