Carry Trades Roar Back Into Favor as Emerging Currencies Rally

Emerging market carry trades are taking off again, as currency volatility subsides amid signs President Donald Trump's aggressive tariffs may not get fully enacted.
An index of carry returns — for which a trader borrows in a low-yielding currency and then invests in another offering higher returns, hit a seven-year high in late May. Asset managers have boosted long positions in developing-nation currencies in recent weeks, with those on Mexico's peso reaching a nine-month high, based on CME Group Inc. data.

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