U.S. investment bank Morgan Stanley said on Monday it was taking"a few chips off the table" after a thundering rally in emerging markets over the last month.
The bank said it was sticking to its core view that developing economy currencies and select countries' bonds would continue to climb, but was dialling back its bullish bets after November's surge.That included closing long positions on South Africa's rand, which has surged 13per cent since June, tightening stop-losses on Latin American currencies like Brazil's real and Mexico's and Colombia's pesos, and chopping back a bunch of bond bets including in Egypt and Ukraine.
A more encouraging signal could be an expected increase of the International Monetary Fund's Special Drawing Rights that is likely, in dollar terms, to be worth between US$500 billion to over US$1 trillion.