BNY: Precious Metals Slump Tempers ZAR, PEN Carry Outlook
BNY's Geoff Yu argues that weaker precious metals are undermining terms of trade for South Africa and Peru, limiting upside for the rand and sol despite supportive carry.
ZARPEN
BNY strategist Geoff Yu notes that the recent slump in precious metals is weighing on the terms of trade for South Africa and Peru.
This dynamic is limiting the upside potential for the South African rand (ZAR) and Peruvian sol (PEN), even as both currencies benefit from a favorable carry environment.
Key takeaway: the precious metals downturn acts as a headwind, offsetting some of the support typically provided by high carry yields.
Source: FXStreet Forex News