Nomura and Bank of America Merrill Lynch are optimistic about arbitrage trading in emerging markets, with returns last year reaching the strongest since 2009.

At the beginning of 2026, investors who sold US dollars to buy emerging market currencies have reaped significant gains. Top bank strategists predict that this strategy, which saw an 18% increase last year, still has room for further growth. According to a Bloomberg index tracking the returns of eight emerging markets, arbitrage trading - the strategy of borrowing low-interest currency to buy high-interest currency - has already increased by 1.3% so far this year. With President Donald Trump's policies putting heavy pressure on the US dollar, strategists from Morgan Stanley, Bank of America, and Citigroup believe that last year's returns are likely to continue; the returns last year were the highest since 2009.