Emerging-market carry traders are increasingly funding positions using currencies other than the U.S. dollar, according to Bloomberg coverage. As the dollar strengthens, some traders are moving away from dollar funding and toward alternative exchange rates to pursue “carry” strategies—where investors seek returns by borrowing in one currency and investing in another, typically aiming to benefit from interest-rate differentials and currency valuation moves. The reports say the shift is directed toward currencies such as the euro and the Australian dollar as sources of funding for bets linked to developing markets. The discussion frames the change as a response to the recent strength of the U.S. dollar, which can raise the cost or reduce the attractiveness of dollar-based funding. The coverage presents the developments as part of broader portfolio and funding adjustments by market participants, rather than as a single-country policy shift. Overall, the articles indicate that traders are reallocating funding currencies to maintain the profitability or feasibility of carry trade exposures amid changing global currency conditions.
Emerging-market carry traders reduce use of U.S. dollar, shift to other currencies
Emerging-market carry traders are increasingly funding positions using currencies other than the U.S. dollar, according to Bloomberg coverage. As the dollar strengthens, some traders are moving away f...
- Emerging-market carry traders are increasingly using currencies other than the U.S. dollar for funding.
- The shift is linked to the U.S. dollar strengthening relative to other currencies.
- Traders are reportedly moving toward euro-based and Australian-dollar-based funding.
- Carry trade strategies involve borrowing in one currency and investing in another to capture relative returns.
- The change reflects broader market adjustments rather than a specific single-market event.
This week, Vinicius Andrade joins Kelsey Butler to discuss how emerging-market traders are increasingly turning to currencies from the euro to the Australian dollar to fund bets in the developing world as the US dollar roars back.
2 hours agoEmerging-market traders are increasingly turning to currencies from the euro to the Australian dollar to fund bets in the developing world as the US dollar roars back.
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