Reported 11 months ago
The unwinding of immensely popular currency carry trades, notably involving the Mexican peso, has caused significant disruption in foreign exchange markets from Mexico to Hungary and Turkey. Investors have been rapidly exiting these trades, characterized by borrowing in low-interest rate currencies like the yen and franc to invest in higher-yielding ones. The sharp decline of the peso against the yen, influenced by election results, has sparked concerns about the viability of such trades amidst rising market volatility, with analysts questioning the future direction of these strategies and the impact of factors like interest rates and political developments.
Source: YAHOO