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
- Bitcoin’s Sell‑Side Risk Drops to Monthly Low as Long‑Term Holders Ease Profit‑Taking
- NZD/USD Inches Toward 0.5850 Ahead of US PPI Inflation Release
- Canadian Dollar Holds Firm as Rising Oil Offsets a Stronger US Dollar Before PPI Data
- Hunter Biden launched LAPTOP to cure memecoin grift and created a whole new batch of losers
