GENERAL24 Sept 2026
Treasury Rout Threatens Popular EM Carry Trade as Citi Pulls Back | Stock Market News
US Treasury yields jumped to their highest in decades, and that is hurting the emerging-market carry trade. In this trade, investors borrow in a cheap currency and invest in a higher-yielding one. Citigroup has closed its carry basket, which held the South African rand, Mexican and Colombian pesos and Turkish lira. If you hold such positions, expect more swings and review your currency exposure.
Key Statutory Highlights
- Citigroup closed its carry basket that held long positions in the South African rand, Mexican and Colombian pesos and Turkish lira against the Canadian dollar and Swiss franc.
- A Bloomberg index of cumulative carry returns for eight major developing-nation currencies is set for its biggest monthly decline since March, down almost 1%.
- The Colombian and Mexican pesos, which are favoured for this trade, have underperformed since the Federal Reserve hiked interest rates last week, down 6.6% and 2.6% respectively.
Actionable Advice for Taxpayers / Founders:If your business or portfolio holds emerging-market currency or carry positions, treat this as a signal to review your currency exposure with your advisor, keeping in mind that carry trades often do poorly when volatility and crowding are high.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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