BNY data shows profit-taking in nine of fifteen high-yield currencies, signaling caution ahead of H2 market shifts.
Investors are scaling back carry trades after a strong run, with BNY’s iFlow Carry index briefly turning negative. The move reflects growing profit-taking in nine of fifteen high-yield currencies, a shift from recent resilience in the strategy.
The pullback follows months of steady gains in carry trades, where investors borrow in low-yielding currencies to fund purchases in higher-yielding ones. The index’s dip suggests heightened caution as market conditions evolve into the second half of the year.
No immediate market reaction was detailed, but the trend points to potential volatility as positioning adjusts.