Neutral positioning in carry currencies, including dollar-funded trades, signals potential for renewed exposure growth.
Carry trade flows in G10 foreign exchange markets are showing patterns similar to the 2023 upswing, driven by policy divergence and investor positioning. Analysts note neutral exposure in carry currencies, particularly those funded by the dollar, suggests room for rebuilding positions.
Inflows into G10 FX have broadened, while emerging market currencies like the Hungarian forint (HUF) and South African rand (ZAR) faced selling pressure. The shift mirrors last year’s dynamics, where carry strategies gained traction amid divergent monetary policies.
No immediate market reaction was specified, but the trend highlights growing investor appetite for higher-yielding assets in a stable rate environment.