“In EMFX, we are long USD-Asia, defensive elsewhere,” Citi strategists led by Willer wrote in a note Friday. They are recommending expressing this bet via a dollar versus Indian rupee call spread and a bearish offshore yuan position by paying points.

Brendan McKenna, a strategist at Wells Fargo in New York, says that investors should bet against any currencies with a high exposure to Chinese risk. In particular, he’s betting against the Korean won, the Philippine peso and the Taiwanese dollar. Outside of Asia, he says the usual suspects that are susceptible to trade risk will be hard hit, and people should stay away from the Brazilian real, Mexico’s peso, the Chilean peso and the South African rand.

Societe Generale, on the other hand, is recommending investors short dollar versus offshore yuan in the two to four weeks leading up to the G-20 meeting in late June. The Asian currency could become “meaningfully stronger in the short term” if the PBOC deploys more policy tools and if there’s a positive development in China-U.S. trade talks, says Jason Daw, head of emerging markets strategy at the bank. He suggests a short dollar against the offshore yuan bet at 6.9045 with a target of 6.82 and a stop at 6.94.

Valuation Not Enough

For Satoru Matsumoto, a fund manager in Tokyo at Asset Management One Co., with over $500 billion in assets under management, attractive valuation isn’t enough to start buying.

While emerging-market asset prices have become relatively attractive, growth concerns due to the lingering trade war could still put a downward pressure of both developed and developing markets from here, he said.

“Like the South African rand, which looks pretty attractive on the chart, it is still not a good time to enter because it’s vulnerable to the global and Chinese economic slowdown and also as it is used as proxy to the EM trade,” Matsumoto said in a phone interview. “Investors are looking for a good investment opportunity, but it’s actually quite difficult now.”

Extend duration

As central banks around the world may adopt a more dovish stance in response to the impact of the trade war on global activity, it makes sense to be long duration -- a position that profits from interest rates falling in the future -- some investors say.

Citi strategists are long duration in Brazil, Mexico, China and Thailand, and BBVA is extending duration on rates, while limiting foreign exchange exposure. Alejandro Cuadrado, a senior strategist at BBVA in New York, says that while there is technical room for a rebound in currencies, that looks unlikely as the external outlook remains clouded.