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US Dollar: Volatility sinks as carry trades hold – ING - tmgm.com
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US Dollar: Volatility sinks as carry trades hold – ING tmgm.com
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4 itemsING Economics
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.