For much of the last decade, foreign exchange (FX) trading was a pretty straightforward game.
Currency managers were able to earn healthy returns by exploiting a couple of simple factors: carry and momentum.
The carry trade involves selling a low interest rate currency and investing the proceeds in a higher-yielding currency, while momentum strategies exploit the tendency of FX moves to trend over time.
Data from Deutsche Bank shows carry and momentum strategies earned annualised returns of 7.27% a
The week on Risk.net, July 14–20, 2017Receive this by email