Economics & Growth | FX | Global
Currency markets often confound investors. Unlike equities or bonds, they are a long-short market, so if you buy one currency – say the dollar – you also sell another currency – perhaps the euro. This leads many to believe that there are no recurring sources of investment returns to be made from currencies. Yet specialists know better. Several strategies have proven to deliver returns, whether that is the currency carry trade (buying high interest rate currencies and selling low interest rate ones) or simply following the trend and buying the currency with the most momentum. But even with these strategies, many struggle to find useful links between economic indicators and currencies.
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