According to the latest BofA Global Research FX and Rates Sentiment Survey, conducted between December 6 and 11, 2024, investor sentiment towards emerging market (EM) currencies has reached its lowest point since 2022. The survey, which included responses from 45 fund managers with a combined USD 748 billion in assets under management, highlights a growing bearish outlook on EM FX, despite optimism regarding tariffs. "A quasi-consensus appears to have emerged around shorting EMFX, with positioning and sentiment reaching their Oct-23 and Mar-22 lows," the report notes. This sentiment is driven by heightened uncertainty around US-China trade tensions and oil prices, with investors expressing a preference for short EMFX positions as the most popular trade in the EM complex. The survey also indicates that while investors are bearish on EMFX, they do not expect significant increases in tariffs on China, suggesting potential further weakening of EM currencies if risks materialize.