Citi Says Biggest Carry Trade Rally in Years Has Longer to Run Buying emerging-market currencies against the dollar this year has delivered some of the most attractive returns of the decade, and according to Citi’s head of strategy, the trade still has further to run. A more pro-actively dovish stance from the Federal Reserve, combined with caution from emerging-market central banks, will continue to bolster developing-world currencies against the dollar, Luis Costa, Citi’s head of emerging-market strategy, said in an interview. A Bloomberg index that measures carry-trade returns from eight emerging markets, funded by short positions in the dollar, has climbed more than 10% this year and is now on track for the biggest yearly gain since 2017. The carry trade is a strategy that involves borrowing in countries with low interest rates to invest in higher-yielding assets and currencies. (Bloomberg)