Carry trade gains traction as currency volatility turns lower
New York
CONDITIONS in the US$5.3 trillion foreign-exchange market have turned supportive for one of the most popular trading strategies - the carry trade.
Returns from the technique, in which investors borrow in currencies with low interest rates and use the proceeds to buy an asset with higher rates, advanced last week to the highest levels since December, according to a Deutsche Bank AG index. The results were aided by rallies this month of 4 per cent for both South Africa's rand and Canada's dollar against the euro.
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