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Yuan vs. Yen vs. Franc: Shifting Carry Trade Strategies
Carry trading is a popular investment strategy where traders borrow money in a currency with a low interest rate and invest it in a currency with a higher interest rate. The goal is to capture the difference between the interest rates, known as the "carry." This strategy is particularly attractive in times of low volatility, as it relies on stable exchange rates to avoid eroding the gains from interest rate differentials. We discussed more about carry trading in this article. Historically, the Japanese yen (JPY) and the Swiss franc (CHF) have been the primary funding currencies for carry trades. Both currencies ... (full story)