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Emerging-Market Carry Trade Makes Comeback

  • Argentinian, Mexican pesos and rand lead carry-return rebound
  • Implied returns rising as currency volatility moderates
Bloomberg business news
El-Erian Says Active Investors Have Upper Hand
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It’s looking like a good month for investors in the emerging-market carry trade.

Having been pummeled in the second quarter as the dollar strengthened and capital flooded out of developing nations, currency-arbitrage returns are turning positive again. Traders borrowing greenbacks to buy the Mexican and Argentine pesos and the South African rand have been especially well-rewarded.