Those calls come as the U.S. Federal Reserve appears to be seriously considering cutting U.S. interest rates. As dollar-based investments begin to yield less interest, that may weaken the greenback against the currencies of higher-interest countries — including many in the developing world.
"What we see now is that the dollar is probably topped out against a number of the emerging market currencies," said Mike Ryan, chief investment officer for the Americas at UBS Global Wealth Management.
This does not signal broad-based U.S. dollar weakness, he added, noting that other developed-country central banks are also looking to pivot on rate policy.
Khoon Goh, head of Asia research at ANZ Bank, echoed that view.
The term "carry trade" refers to a strategy in which investors borrow in a currency with low interest rates in order to purchase assets in a currency with higher interest rates. That way, they can earn from their investments in another currency while paying less interest on the amount borrowed.
Goh said ANZ continues to favor some currencies in Asia such as the and the Indonesian rupiah. Benchmark interest rates in India and Indonesia are 5.75% and 6%, respectively, compared to the Fed's target between 2.25% and 2.5%, according to Trading Economics.
The picture in terms of the U.S. dollar index is "a little bit more muddy," but it's clearer for high-yielding currencies of countries with a "compelling growth story" or scope for economic reforms that will spur foreign inflows, he added.