Dealer views mixed over future of profitable EM FX carry trade

- By Cole Lipsky
- 11 Dec 2025

If the first half of 2025’s currency markets were characterised by record-breaking months of volumes and volatility, the back half of the year has been defined by a range-bound US dollar, promoting an environment for carry trades in emerging markets (EM), particularly in Latin America, to take off.

Positioning in these strategies normally builds when there is a sustained period of very low volatility. Carry trades involve borrowing in lower-interest-rate currencies to buy those that offer higher

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