J.P. Morgan says emerging market currencies are showing signs of being overbought and expects a tactical pullback in the near term. The bank is adjusting its positioning, revising down its previously bullish stance on EMFX.

As part of the shift, J.P. Morgan is scaling back its overweight recommendation on the Mexican peso (MXN), which has been one of the standout performers in the space. While structural support for EMFX remains intact, the bank warns that recent gains may have outpaced near-term fundamentals, warranting a more cautious tactical stance.

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