Korea's largest companies have committed to roughly $1.5 trillion of capital spending over 10 years, and RBC Capital Markets' currency desk says that number is the reason it is still long the Korean won.
The won has risen 12% in two months and 8% since the desk put the trade on, which is normally where a position gets closed. Abbas Keshvani said the currency is not yet expensive enough against what the desk thinks it is worth to justify selling it.
"It is a little bit on the rich side no doubt, but that richness can easily be closed in a month."
Keshvani is RBC Capital Markets' Asia macro strategist, Luis Estrada its Latin America currency strategist and Daria Parkhomenko a currency strategist on the same desk, and the calls they give here are positions the desk has on: long Korean won and Malaysian ringgit, long Brazilian real against the Mexican peso, and a three-month option structure on the peso.
I listened to the full segment so you can skip it.
Here are the 6 calls that matter.
🎙️ Host: Abbas Keshvani, Asia Macro Strategist on RBC Capital Markets' desk strategy team, who presented this edition
👥 Also on: Luis Estrada, LATAM FX Strategist at RBC Capital Markets; Daria Parkhomenko, FX Strategist at RBC Capital Markets
📰 Published: 9 September 2026 on YouTube · recorded 3–4 September 2026
🔴 YouTube | 🔗 RBC Capital Markets | ⏱️ 11 min
Key Takeaways
Emerging-market currencies need solid growth and calm inflation, and right now they have both
The Korean won is up 12% since midyear and the Colombian peso 8%
The one exposure the desk will not take is a bet on cheaper oil
Asia is mostly an oil and gas importer, so the AI export boom does not shield it
The desk stays long the Korean won on $1.5T of committed corporate spending over 10 years
The Bank of Korea hiked and raised its growth forecast to 3% from 2.6%
Brazil pays some of the highest interest in emerging markets and the desk still won't own the real against the dollar
Rising US Treasury yields and a recovering Japanese yen are pulling money out of those positions
A hot Polish inflation print did not change the call that the zloty underperforms the Czech koruna
Poland's rate market prices about 60 basis points of hikes over 12 months, and Parkhomenko expects the central bank to hold
The Czech Republic's 2027 budget deficit is the thing to watch in central European currencies
A wider deficit raises inflation risk, which is exactly what the Czech central bank says it is watching
Mexico's currency turns on whether it gets its own bilateral deal with Washington
16.50 to 16.20 pesos per dollar if it does, closer to 18 if it does not
1. Growth Up, Inflation Cool
Keshvani opened by naming the two conditions emerging-market currencies need and saying both are in place. Emerging-market currencies have been rallying since the middle of the year, with the Korean won up 12% and the Colombian peso up 8%.
The framework is simple and he stated it as the desk's standing view: "As listeners of this podcast will know, EMFX is best suited to a climate of robust growth and cool inflation."
Growth is holding up because emerging economies are selling what the world wants: "EM economies have enjoyed solid demand for manufactured goods like Korean semiconductors or commodities like Chilean copper."
Inflation has stayed contained enough that developed-market central banks have not had to tighten, which is the part that keeps money flowing into higher-yielding currencies
The whole call carries one condition. Keshvani said that "unless we get a pickup in inflation that necessitates tighter monetary conditions, EMFX should continue to enjoy a healthy macro backdrop."
2. Asia Pays for Higher Oil
Estrada pushed back immediately on whether a constructive view can cover countries that buy their energy: "Abbas, I hear you on the current backdrop for EM, but given the ongoing disruption to energy supplies, surely that does not extend to energy importers, right?"
Keshvani agreed, and the caveat is the reason the desk is picking currencies rather than buying the asset class.
He said the desk will not take the other side of the oil price: "One of the caveats to our generally constructive outlook is that one should avoid being short oil, because our commodity analysts caution that the war continues to disrupt energy prices while a diplomatic offramp for the war remains elusive."
That warning is RBC's commodity team's, relayed by Keshvani rather than his own work
Asia is the region most exposed, because most of it buys oil and gas rather than sells it, and technology exports do not offset that: "So even though a lot of Asian tech exporters enjoy the glow of AI, the region is relatively vulnerable to higher energy prices."
The desk expresses the Korea view against energy importers rather than against the dollar — it is long the won and funds the position by being short the Indian rupee and the euro, so the trade pays if the won outperforms those two
On the one Asian currency that gains from expensive energy: "We're also long the Malaysian ringgit, which as it turns out is Asia's only major energy exporter."
3. Still Long the Korean Won
Estrada put the profit-taking question directly: "On the topic of Korea, the currency has rallied 12% in 2 months, 8% since you entered the bullish trade. Are you planning to take profit?"
Keshvani's answer rests on committed corporate spending rather than on the currency's momentum. Korea's largest companies have signed up to "a capex expanding plan of around $1.5 trillion," which he said supports a medium-term bullish view on the won because it should pull foreign direct investment into the country
"It's a colossal amount of money and they're planning this over 10 years," he said
The exit condition is a valuation one and it has not been met: he said the desk would close the trade only if the won were "trading egregiously expensive relative to fair value," and it is not there yet
"It is a little bit on the rich side no doubt, but that richness can easily be closed in a month"
He said the desk does not know the schedule of the incoming investment, which leaves "a risk of closing out too soon"
Korea's central bank raised rates last week as expected and lifted its growth forecast, which Keshvani read as confirmation of the same story: "They upgraded the growth forecast to 3% from 2.6%. That really underscores how Korea is riding the AI boom."
The pace should slow from here even though the direction does not change. "We've been seeing something like a 1% won rally each month for the last two months," he said, and future inflows should arrive more slowly: "It won't be as positive as it has been so far, but we still do expect a gradual pace of gains in the won."
4. Brazil Pays But They Pass
Keshvani turned to Latin America and asked Estrada why the desk is not collecting Brazil's high interest rate, given that Brazil exports energy and its economy looks solid.
Estrada said the currency has stopped responding to Brazil's own economics: "Brazil's energy exposure and high carry are supportive, but BRL is no longer trading purely on economics."
The problem is what a US investor can earn at home instead: "US Treasury yields are testing new highs, making EM carry hard to own"
Two more signals point the same way, and one of them is a positioning signal rather than an economic one: "At the same time, the recovery in the Japanese yen signals that investors may be reducing leveraged carry positions, and the Brazil election is underway, and given this backdrop, Brazil is particularly sensitive."
A stronger yen usually means investors are unwinding borrowed positions funded in yen, which is how money leaves higher-yielding currencies
He was explicit that this is not a negative view on the real. The currency touched 5.22 to the dollar last week, and Estrada said that level "does not make us bearish BRL"
The desk owns the view in relative form instead: "But the cleaner expression is relative value where we are less exposed to the dollar. So we therefore prefer long BRL MXN, playing a rotation back towards Brazil." That is a bet on the Brazilian real against the Mexican peso, which pays off on Brazil outperforming Mexico regardless of what the dollar does
5. Zloty to Lag the Koruna
Keshvani asked Parkhomenko whether Poland's flash headline inflation reading for August, published on 31 August and higher than expected, changes her call that the Polish zloty underperforms the Czech koruna.
The rates divergence
"So the short answer is that it doesn't change my view, but it does make me more cautious," she said
The call rests on the two central banks moving apart — she expects the Czech National Bank to be more hawkish than the National Bank of Poland
The inflation surprise changes the tone of the next Polish meeting without changing the destination: "Now, the upside surprise in Poland's headline CPI means that most likely Governor Glapinski is going to backtrack on his dovishness at the upcoming meeting this month, but I don't think this headline CPI number is enough to change my view that most likely the National Bank of Poland is going to be holding rates for the foreseeable future."
The trade is really about what Poland's rate market has already priced: "There's about 60 basis points of hikes priced in over the next 12 months, and if they under-deliver then that can potentially weigh on the Polish zloty relative to the Czech koruna."
Two data points to watch: Poland's August core inflation on 16 September, which lands after the National Bank of Poland's September meeting, and Czech inflation data on 4 September and 10 September
On the Czech side, Parkhomenko said the August meeting carried a dovish tilt because the bank signaled it would be "in a wait and see mode going forward" — but she flagged the qualifier: "But at the same time, I will also point out that when they were talking about the risks, they mentioned that the risks are still inflationary overall, and that means that the risk of another hike still remains."
Fiscal and geopolitics
Draft budget plans for 2027 are now public for both countries, and Parkhomenko said the Czech one is the more interesting: the government proposed a deficit much larger than expected for next year, and has to submit a final plan to parliament by the end of September
The final number may come in below what was announced, but she does not expect it back at this year's level: "But I think ultimately that deficit number for 2027 is still likely to be larger than the one for 2026."
Why the budget matters for the currency pair: "The reason this outcome is key to watch is because a wider deficit can be an upside risk to inflation, and this is something that the CNB is watching for its policy stance." A larger Czech deficit would push the zloty lower against the koruna
On the geopolitical case, she said the koruna is the region's defensive currency: "Then shifting to the geopolitical side, if the risks were to escalate on Russia and Ukraine, or worsen in the Middle East, then under either of those scenarios, the Czech koruna is likely to be the safe haven in the CE3 region and outperform the Polish zloty, thereby pushing PLN Czech lower if either of those outcomes were to play out."
The desk holds a second defensive currency for the same reason: "We are also bullish CNH since Chinese authorities are likely to steer the currency through any volatility, and also China is less exposed to higher energy prices"
6. Mexico Needs Its Own Deal
Keshvani asked Estrada how trade tensions between the United States and Canada feed through to Mexico over the medium term.
Estrada treats Canada as the leading indicator for Mexico: "Canada is becoming a test case for how aggressively Washington is prepared to reinterpret USMCA."
The transmission runs through the price investors demand for Mexican risk: "If tariffs persist overriding the agreement, investors will attach a larger risk premium to Mexico as well." He said that would delay investment decisions, weaken the flow of factory work moving from Asia to Mexico, and push the dollar higher against the peso
Estrada said a separate Mexico-United States agreement is now the only route available, because a return to three-way negotiations looks very unlikely — and that it "could bring certainty albeit at a cost"
What such a deal would buy is clarity on which goods qualify for tariff-free treatment: "The certainty on steel and rules of origin would unlock FDI into Mexico that is currently at risk."
The two scenarios carry a number each: "In that scenario, USD MXN could move towards the 16.50, 16.20 area that we saw in 2024, and a failure to get to an agreement could send it closer to 18 pesos per dollar." That is 16.50 to 16.20 pesos to the dollar if a deal lands, and nearer 18 if it does not
The desk's expression of that view is an option position rather than a spot position: "This is why we recommend a three-month put spread with a 16.50, 16.00 strike, limiting the downside of not reaching an agreement." The structure pays if the dollar falls to between 16.50 and 16.00 pesos and costs less than a plain option because the payoff stops at 16.00
Bonus Insights
The three strategists did not record together. Keshvani said he taped his portion on 4 September and his colleagues theirs on 3 September, so every call here predates the Polish and Czech central bank meetings they discuss
Parkhomenko's Czech inflation dates bracket the recording itself — one release on 4 September, the day Keshvani recorded, and another on 10 September
Keshvani's closing summary is the whole segment in one sentence: "It sounds like we agree that this is a relatively healthy environment for EMFX, but we are being selective on the EM currencies that we like so as to avoid exposure to higher energy prices and also idiosyncratic country risks"
The desk's shared bottom line is that emerging-market currencies still have the growth and inflation backdrop they need, but the way to own them now is selectively — long the Korean won and the Malaysian ringgit rather than anything that loses when oil rises, the Brazilian real against the Mexican peso rather than against the dollar, and the Czech koruna against the Polish zloty.
Products, Companies & Tools Mentioned
RBC Capital Markets (The desk running all of these positions; its commodity analysts supply the warning against being short oil)
Bank of Korea (Hiked as expected last week and raised its growth forecast to 3% from 2.6%, which Keshvani read as confirmation that Korea is riding the AI boom)
National Bank of Poland (Parkhomenko expects it to hold rates for the foreseeable future despite the August inflation surprise, against about 60 basis points of hikes priced by the market)
Czech National Bank (Its August meeting signaled a wait-and-see stance, but it still describes the risks to inflation as skewed upward, so another hike remains possible)
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