Looking for the best carry trade in currency markets? The Taiwan dollar leads the pack.
With global currency volatility near a three-month low, conditions are supportive for carry trading in emerging currencies from the Brazilian real to the Thai baht and Russian ruble. The Taiwan dollar trade has outperformed this year, defying concerns that U.S. President Donald Trump may impose protectionist policies that hurt the island’s exports, which are critical to its economy. Overseas shipments have actually been growing. Taiwan also recently raised its 2017 economic growth forecast, and its financial markets are sizzling.
“There’s risk-on sentiment in the market and Taiwan is perceived to be a big beneficiary of the U.S. growth story, together with some others like South Korea,” said Tsutomu Soma, general manager of SBI Securities Co.’s fixed-income department in Tokyo. “Risks from protectionist policy remain, but such policy won’t materialize overnight and its impact won’t be seen any time soon.” [Read more... http://snip.ly/vmaqx ]