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Real and rand lead EM carry trade rebound

May 17, 2026 at 13:07 UTC

2 min read
Emerging market banknotes on a trading desk illustrating EM FX carry trade rebound in currencies

Key Points

  • Emerging-market carry trades are regaining investor interest
  • Brazilian real is forecast to appreciate modestly versus the rand
  • South African rand is projected to post a stronger monthly gain
  • Currency forecasts suggest conditions that support carry trades

EM carry trades regain momentum

Emerging-market carry trades are seeing a rebound, with investors showing renewed interest in high-yielding currencies. Within this trend, the Brazilian real and the South African rand have emerged as favored options for those seeking to benefit from interest-rate differentials and anticipated currency moves.

The focus on these two currencies reflects their recent performance expectations. Forecasts indicate that both are set to record monthly gains, creating an environment that market participants view as supportive for carry trade strategies involving the real and the rand.

Forecasts for the Brazilian real

As of May 16, 2026, the Brazilian real is forecast to close at 16.73 rand. This projection implies a 0.4% increase for the month, pointing to a modest appreciation of the Brazilian currency against the South African rand.

The positive monthly change underscores why the real is cited among the leading currencies in the emerging-market carry trade rebound. Even a relatively small projected gain can be attractive when combined with the currency’s yield characteristics in carry strategies.

Performance outlook for the South African rand

The South African rand is also expected to post gains over the same period. It is predicted to close at 6.618 rand against the dollar on May 16, 2026, marking a 1.7% increase for the month.

This projected move represents a stronger monthly performance than that forecast for the Brazilian real in percentage terms. The rand’s anticipated appreciation helps explain its status as one of the preferred currencies in the current phase of emerging-market carry trades.

Implications for carry trade strategies

Together, the forecasts for the Brazilian real and the South African rand signal a backdrop that is viewed as favorable for carry trades involving these currencies. The combination of expected currency appreciation and their role as high-yielding emerging-market units has drawn investor attention.

Market participants monitoring these projections see them as part of a broader rebound in emerging-market carry trades. While the outlook is based on specific forecast levels and monthly percentage gains, it highlights how shifts in currency expectations can quickly influence cross-border investment flows into favored markets.

Key Takeaways

  • Forecast gains in the real and rand underpin renewed interest in emerging-market carry trades.
  • The rand’s larger projected monthly rise highlights its relatively stronger near-term performance.
  • Both currencies illustrate how modest forecast appreciation can still be significant in carry strategies.

References

  1. 1. https://randforecast.com/dollar-to-rand-prediction
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