Rupee and Chilean peso lead gains against UDS, CME Group

The Indian rupee and the Chilean peso have led gains among global currencies in carry trade performance during the third quarter, posting returns in excess of 7% against the US dollar, according to the latests Currency Market Monitor published by CME Group.

Other strong performers during the quarter included the Russian ruble, which returned 5.7% against the dollar, and the Mexican peso, up 4.9%, during the quarter.

The South African rand was the only currency among 20 studied to lose value against the dollar, reflecting a sluggish US economy and a renewed “risk on” attitude as Europe’s financial crisis appeared to stabilize. Carry trades involve borrowing in nations with low interest rates to invest in higher-rate countries.

CME Group analysts also identified the Norwegian krone as the most overvalued currency relative to the dollar, followed by the Swiss franc and the Australian dollar. Highly under-valued currencies included the Polish zloty, the Hong Kong dollar and the Mexican peso.

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