That currency hedge craze is getting hammered

Are EM currencies in a sticky situation?

One of the year's most popular trades is losing steam in a hurry as the currency landscape suddenly looks a lot different.

Currency hedging had been the hottest thing going, with exchange-traded funds focusing on expected developments around the world attracting billions in investor cash.

But as dynamics change, the anticipation that the U.S. dollar would continue to strengthen against its global peers is in doubt, and so are the accompanying trade positions.

For instance, the euro has lost as much as 13 percent against the dollar in 2015 as forex traders bet that the European Central Bank would be easing its monetary policy as the Federal Reserve was taking actions to strengthen the greenback.