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More Pain Seen for Worst FX Strategy as Carry Traders Suffer

  • Low volatility no panacea as yen’s surge dooms returns
  • Global macro risks dent hope of turnaround in second quarter
Bloomberg business news

HSBC's Maher Discusses the Dollar as N.Korea Eases Tensions

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For one of the most popular trading strategies in the $5.1 trillion-a-day currency market, the past year has been difficult and the prospect of respite any time soon seems remote.

Carry trades, or borrowing where interest rates are low and investing the proceeds where they’re higher, are set for a fourth straight quarter of losses despite the relative calm of foreign-exchange rates over the past three months. For analysts, the potential for rising volatility amid escalating global trade tensions suggests there’s little hope of a turnaround on the horizon.