A hedge-fund trade blamed for a massive market blowup in 2024 has made a big comeback, Goldman Sachs says
Key takeaway
Goldman Sachs reports a major comeback of the currency carry trade, reaching multi-year highs.
- Step 1 · The triggerGoldman Sachs reports carry trade comeback — leveraged FX positions increase.
- Step 2 · Knock-onHigher leverage amplifies currency moves; low-yield currencies (yen, franc) weaken, high-yield ones strengthen.
- Step 3 · Knock-onUS SMEs with unhedged FX exposure face wider profit swings; hedging costs rise as volatility increases.
- Step 4 · Reaches youIf the trade reverses (risk-off), rapid unwinding causes sharp FX moves, potentially triggering margin calls and liquidity stress for leveraged SMEs.
The trigger is reported by the source below. The steps that follow are Branch²’s traced reasoning — how the shock could reach a business like yours, not a prediction.
Source: MarketWatch
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