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The most simple is to hope the price keeps going up, but there are a number of more sophisticated trading strategies. Most of these revolve around ensuring the cost of funding is even lower than that of the yields, for example, by using swap markets or currency forwards. In many cases, the shape of the curve is just as important as the outright yield level.
BUENOS AIRES (Reuters) – Argentina’s central bank will play a crucial role in propping up the peso ahead of October’s presidential election, analysts said on Friday, toeing a politically fraught line between providing support without blasting through its reserves.
The century bonds, sold in 2017, tumbled 29% this week, even after gaining on Thursday and Friday. That’s a big loss for the largest reported holders, which include BlackRock, Royal Bank of Canada, Legg Mason Inc (NYSE:LM). and Northwestern Mutual Life Insurance Co., according to data compiled by Bloomberg.
By 3:30 AM ET (0730 GMT) the dollar index, which measures the greenback against a basket of developed market currencies, was at 98.078, up 0.1% from late Thursday in the U.S. and on track for a gain of around 0.7% on the week.
TOKYO (Reuters) – The dollar held onto gains on Friday after a surge in U.S. retail sales eased concerns about the world’s top economy, but traders cautioned against reading too much into one piece of data given the growing risks to the outlook.