Carry Trade Wins Again in Currencies Amid Post-Brexit Stability
- Prospects for stimulus from ECB, BOJ foster opportunities
- Strategy is a money maker in nine of the past 10 weeks
This article is for subscribers only.
A bit of calm and prospects for more stimulus from some of the world’s largest central banks are creating a window of opportunity for one of the most popular trading strategies in the $5.3 trillion-a-day foreign-exchange market.
Carry trades, which involve borrowing in low-interest currencies to buy higher-yielding ones, have made money in nine of the past 10 weeks, according to a Deutsche Bank AG index that tracks the Group-of-10 sphere. Since July 1, all 31 major currency carry trades funded with the yen have made money except the Turkish lira, according to data compiled by Bloomberg.