Lien is especially focused on the Mexican peso and the South Korean won - for very different reasons. Mexico is currency offering a 4.5% yield, which "in the context of what we're getting here in the U.S. is incredibly generous," Lien says. The peso has been strong lately, but she expects the pattern to continue. "If we start to get this recovery in the U.S. and the money they're printing that's funneled into the U.S. economy is helping to keep demand supported, that at the end of the day could translate into a bit more demand for the peso."
The won, Lien says, is considerably less attractive, and she is looking for opportunities to buy the dollar against the Korean currency. "If everyone's call about the short yen trade is correct, Korea stands to suffer significantly," she says. A significant portion of Korea's exports go to Japan - which is widely expected to soon initiate major new monetary stimulus that is likely to weaken the yen. "If the yen is cheap, Japanese importers have less purchasing power," Lien explains. On top of all that, the dollar has been weak lately against the won, "so this could be a good entry point."
Time to get busy.