- People’s Bank of China’s currency defense brings risks of higher volatility
- Taiwan dollar has fallen below key psychological support level
The Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest rate and currency volatility, Bloomberg reports.
A strategy of borrowing the island’s currency to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns.