Top Trades in Disarray Amid Emerging-Market Rout: Currencies

It’s less than a month into 2014 and already currency strategists are seeing their top trade recommendations for the year upended by the rout in emerging markets.

Buying Mexico’s peso versus the yen lost about 1 percent within two months of Bank of America Corp. naming the trade one of its top picks in November, with a targeted return of 9.4 percent. Danske Bank A/S exited a trade this month buying Turkey’s lira versus Denmark’s krone at a loss of 2.9 percent. Of 31 major emerging-market currencies, 13 have weakened beyond their median year-end forecasts in Bloomberg analyst surveys.