Carry Trade Gains Traction as Currency Volatility Turns Lower
- Returns surge most since December, Deutsche Bank index shows
- Global foreign-exchange price swings fall to one-month low
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Conditions in the $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 this week to the highest levels since December, according to a Deutsche Bank AG index. The results were aided by rallies this month of 4 percent for both South Africa’s rand and Canada’s dollar against the euro.