Investors look to be playing it safe by choosing carry trade strategies in HUF, MXN and INR – ING
Source Fxstreet
Major FX pairs look to have settled into early-year ranges. Economists at ING analyze FX markets.
If in doubt, seek carry
January and February are typically good months for the Dollar, and our call is for patience rather than jumping on the next leg of the Dollar bar trend just yet. But the overall environment tends to support more range-bound Dollar trading than any aggressive reversal higher in the Dollar just yet.
We doubt US data will move markets today, but as usual, we will be interested in what the NFIB small business survey has to say about activity, employment, and pricing intentions. It is hard to see DXY trading outside of Friday's 101.90 to 103.10 range today – a range that could well define the entire week.
The outperformers this year are the Hungarian Forint, the Mexican Peso, and the Indian Rupee. What do they have in common? They are the highest-yielding currencies in their respective trading blocs. With cross-market volatility remaining fairly subdued it is clear that carry trade strategies will have some enduring appeal. The bigger question may be in which currency to fund them.
Disclaimer: For information purposes only. Past performance is not indicative of future results.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
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The downturn occurred despite the reopening of the U.S. government on Thursday, which many had hoped would provide essential support for crypto markets. This year initially appeared promising for cryptocurrencies, particularly after the inauguration of President Donald Trump, who has established the most pro-crypto administration thus far. However, ongoing political tensions—including Trump's tariff strategies and the recent government shutdown, lasting a historic 43 days—have contributed to several rapid price pullbacks for Bitcoin throughout the year.
Market dynamics are also being influenced by Bitcoin whales—investors holding large amounts of Bitcoin—who have been offloading portions of their assets, consequently stalling price rallies even as positive regulatory developments emerge. Despite these sell-offs, analysts from Glassnode argue that this behavior aligns with typical patterns seen among long-term investors during the concluding stages of bull markets, suggesting it is not indicative of a mass exodus.
Notably, Bitcoin is not alone in its struggles, as Ethereum and Solana have also recorded declines of 7.95% and 28.3%, respectively, since the start of the year, while numerous altcoins have faced even steeper losses.
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