Citi's latest update on its Emerging Market Foreign Exchange (EMFX) factor investing strategy reveals a challenging start to 2025, with the long/short model down 32 basis points in January, despite a 2.1% rise in the long-only benchmark. The report highlights that economic surprises were the only factor to post gains, while other strategies, including momentum and carry, faced setbacks. "EMFX (equal-weighted) rose 2.1% against the USD in January as tariff concerns appeared delayed," Citi analysts note, emphasizing the impact of geopolitical factors on currency performance. The portfolio has shifted to a long position in Latin American currencies like BRL and COP, while shorting Asian currencies such as SGD and CNY. Citi's strategy remains slightly short on emerging markets overall, maintaining a long USD stance.