Citi bets on the Argentine peso and warns about carry trade risks

Carry trade continues to offer investment opportunities in Latin America, driven by high interest rates and expectations of a weaker dollar. Citigroup warns that investors need to be more selective, as international financial conditions could limit returns in the coming months. The entity maintains a positive outlook on the Argentine peso, Colombian peso, and Brazilian real against the dollar, although it considers it unlikely that the extraordinary gains of previous years will be repeated. Fuad Muvdi, head of Citi's foreign exchange operations, notes that differences in interest rates will continue to provide opportunities, but the risks of U.S. monetary policy and exchange rate volatility require cautious assessment. So far this year, the carry trade with the Argentine peso has generated gains of approximately 15% in dollars. Profitability depends on the difference between rates and the evolution of the exchange rate, and exchange rate volatility, especially with the electoral calendar, remains a key risk factor. Citi's favorable outlook comes in the context of monitoring the Central Bank's monetary policy and expectations of devaluation.

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