Dollar Carry Trades Set to Trounce World’s Booming Stock Markets

A simple strategy of borrowing in low-yielding currencies like the Japanese yen or the Swiss franc and putting your money in dollars looks set to beat the implied returns on markets such as European stocks and Chinese government bonds once the volatility of these assets is taken into account, according to Bloomberg calculations. A Bloomberg gauge of the dollar is down about 7% this year — its worst performance in eight years — but it has bounced back around 3% from a September low, in part because of the so-called carry trade.