Reported 2 months ago
A significant unwinding of emerging-market carry trades is occurring as the Mexican peso continues to decline sharply, dropping over 5% against the dollar. In contrast, the Japanese yen and Chinese yuan have gained, increasing by about 3% and 0.7% respectively. This shift is attributed to rising concerns over a potential recession in the U.S. and increased market volatility, forcing traders to cut back on carry trades that involve borrowing at low rates to invest in higher-yielding assets.
Source: YAHOO