The FX carry trade looks poised to continue shining in the second half of the year - Goldman Sachs
USD/CAD — All Desk Targets
| Firm | Stance | YE 2026 |
|---|---|---|
Citi | Bearish | 1.43 |
MUFG | Bullish | 1.34 |
HSBC | Bullish | 1.36 |
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With so much happening already in markets during the first six months of the year, major currencies have been one of the less exciting spots. Outside of the Japanese yen, volatility among major currencies has been relatively subdued with much of it riding purely on dollar sentime
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4 itemsHigh carry + low volatility! Goldman Sachs endorses FX carry trades: the best window in 26 years is now open, with the yen remaining the optimal funding currency. - Moomoo
FX Daily: Surprisingly low volatility keeps carry trade dominant
Current FX conditions, marked by surprisingly low volatility, have rendered carry trades particularly appealing for traders navigating this cautious environment. According to the full note by ING, the subdued risk appetites globally contribute to the carry trade's prevailing allure. This trend is underscored by consistent positioning towards higher yielding currencies, especially as central banks maintain accommodative stances. With upcoming market events sparse, the prevailing low-volatility backdrop is likely to sustain these trading patterns in the near term, allowing for continued dominance of carry strategies.
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