Foreign-exchange dealers warn that traders who have built positions in emerging-market currencies funded with borrowed US dollars could face a painful unwind if the greenback resumes its climb.
The EM FX carry trade has been a leading consensus strategy among hedge funds, asset managers and pension funds. Demand has been supported by persistently subdued volatility and a prolonged period of weakness in funding currencies, including the US dollar and Japanese yen.
Also Read
- Pakistan Dollar Rate Today: USD to PKR Open Market and Interbank Exchange Rates
- Hong Kong Requires Crypto Providers to Track Customer Crypto Trades
- Crédit Mutuel Arkéa Resumes Operations After $133 Million Fraud Attack, but Crypto Loss Remains Unconfirmed
- BoJ Minutes Point to Rising Inflation-Overshoot Worries, but Rate Hike Path Remains Contested