Why the fragile dollar became funder for other currency bets and why it matters

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Published: June 5, 2025 at 6:17 a.m. ET

Current trading conditions provide “a strong environment for carry trades” and believe the best way to fund them is to short, or sell, the dollar, according to research group TS Lombard.

In foreign exchange markets, a popular carry trade strategy is for investors to take a short position in one currency and use it to fund a long position in others, often to take advantage of higher yields and capture that difference. The dollar is becoming that currency.

About the Author

Jules Rimmer is a markets reporter in London.Rimmer spent more than 30 years as a trader and stockbroker in financial markets, starting at Salomon Brothers in the Liar's Poker era, taking in ING Barings, Jefferies and ending it in emerging markets at Investec. He hung up his headset and pivoted to journalism in 2021.

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