The biggest bank in the US reportedly says that a recent strategy to bet against emerging market (EM) currencies hasn’t worked out.

Following President Donald Trump’s “Liberation Day” on April 2nd, JPMorgan Chase provided clients with a trade idea that involved flipping bearish on emerging market currencies, Bloomberg reports.

Say JPMorgan strategists in a note,

“Our UW (underweight) has not worked… We see sufficient arguments that EM FX (foreign exchange) will not weaken versus the USD in the coming period.”

Bloomberg data shows that at least 14 different emerging market currencies have outrun the dollar since April 2nd, with the ###ese dollar (TWD) being the strongest performer of all.

Source: Bloomberg

Strategists at the bank reportedly anticipated that President Trump’s tariffs would put pressure on foreign markets’ currencies, but failed to see that there would also be a shift away from US assets and therefore a weakening of the dollar.

JPMorgan analysts have since double-upgraded their stance on Asian currencies and have now switched to an overweight positioning from underweight.

And currently, according to Bloomberg, the bank is bullish on the Malaysian ringgit (MYR) while expecting the Chinese Yuan (CNY) to hold steady.

Last month, JPMorgan raised the odds of a global recession from 40% to 60% amid President Trump’s trade war.

Mislav Matejka, the head of global and European equity strategy at JPMorgan, reportedly said investors appear to be overly bullish on US equities despite elevated recession risks and trade uncertainty.

Matejka says that, unlike in the past, US stocks are no longer a “good place to hide in” amid an economic downturn.

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