Traders revive emerging market carry trades on vol drop

















































Traders revive emerging market carry trades on vol drop – FX Markets



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Investors turn back to high-yield Latin America currencies as implied volatility falls


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Investors are once again piling back into the emerging market foreign exchange carry trade as they return to strategies that delivered significant profits before the breakout of the Iran conflict.

The Bloomberg FX emerging markets carry index, which measures the cumulative total return of carry positions in eight emerging market currencies funded by short US dollar, hit a multi-year high of 298.1 on April 17. As of May 1, the index was at 296.6. 

Despite concerns about the fragility of the

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