Turkey and the butterfly
MARKET VOICE
The so-called 'carry' trades are becoming increasingly popular. Recently, Standard & Poor's revised Turkey's rating outlook to positive. However, the week before last, Fitch downgraded the rating outlook for Iceland. Typically, there is little fundamental or market link between the likes of Iceland and Turkey. Yet the result was a general sell-off in higher-yielding currencies across emerging markets. On the same day that the ISK fell by -6.41% against the USD, the BRL lost -2.24%, the MXN -1.26
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