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Carry Trades Roar Back Into Favor as Emerging Currencies Rally

Carry Trades Roar Back Into Favor as Emerging Currencies Rally

Bloomberg01-06-2025
Emerging market carry trades are taking off again, as currency volatility subsides amid signs President Donald Trump's aggressive tariffs may not get fully enacted.
An index of carry returns — for which a trader borrows in a low-yielding currency and then invests in another offering higher returns, hit a seven-year high in late May. Asset managers have boosted long positions in developing-nation currencies in recent weeks, with those on Mexico's peso reaching a nine-month high, based on CME Group Inc. data.
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