Volatile Pound Stokes Life Into Emerging-Market Carry Trades
- Shorting sterling versus ruble is trade of week for Citigroup
- Currency’s price swings make developing markets safer bet
Best Day for British Pound Since 2008
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There’s life in the great emerging-market carry trade yet, although now it comes with a twist.
Investors are betting a trade that reaped returns of more than 20 percent last year for borrowing dollars to buy Brazil’s real, Russia’s ruble and South Africa’s rand has further to run -- only they’re using the battered British pound to fund long positions in emerging-market currencies. Citigroup Inc. on Monday named shorting the pound against the Russian ruble its top trade of the week.