SYDNEY: In a year when shorting the US dollar meant financial harakiri, carry traders’ search for an alternative currency to fund bets in emerging markets (EMs) has yielded a surprise winner – the Aussie.
Strategies that seek to profit from interest-rate differences between higher-yielding currencies and lower-yielding ones are producing the biggest returns when funded by the Australian dollar rather than the greenback, euro or British pound and about the same as the yen, according to data compiled by Bloomberg.
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